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

            [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                     For the fiscal year ended June 27, 1999
                                       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 0-23400

                              --------------------

                               DT INDUSTRIES, INC.
             [Exact name of registrant as specified in its charter]

                DELAWARE                                         44-0537828
     (State or other jurisdiction of                          (I.R.S. Employer
     incorporation or organization)                          Identification No.)
     Corporate Centre, Suite 2-300
            1949 E. Sunshine                                        65804
            Springfield, MO                                       (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (417) 890-0102

                              --------------------

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

                                                           Name of each exchange
       Title of each class                                  on which registered
       -------------------                                  -------------------
                                      None

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

                     Common Stock, par value $.01 per share
               Series A Preferred Stock, par value $.01 per share
                         Preferred Stock Purchase Rights
                              (Title of each class)

                              --------------------

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

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

     As of September 17, 1999,  the  aggregate  market value of the voting stock
held by non-affiliates  of the registrant was $67,156,320  (based on the closing
sales price, on such date, of $6.875 per share).

     As of September  17, 1999,  there were  10,107,274  shares of common stock,
$0.01 par value outstanding.

                              --------------------

                       DOCUMENTS INCORPORATED BY REFERENCE
           Proxy Statement Dated October 6, 1999 (portion)(Part III).

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<PAGE>

                               DT INDUSTRIES, INC.
                               INDEX TO FORM 10-K


                                                                            Page

                                     Part I

Item 1.        Business...................................................     1

Item 2.        Properties.................................................    10

Item 3.        Legal Proceedings..........................................    11

Item 4.        Submission of Matters to a Vote of Security Holders........    11

               Information Regarding Forward Looking Statements...........    11


                                     Part II

Item 5.        Market for Registrant's Common Equity and Related
               Stockholder Matters........................................    12

Item 6.        Selected Financial Data....................................    13

Item 7.        Management's Discussion and Analysis of Financial Condition
               and Results of Operations..................................    14

Item 7A.       Quantitative and Qualitative Disclosures About
               Market Risk ...............................................    14

Item 8.        Financial Statements and Supplementary Data................    14

Item 9.        Changes in and Disagreements with Accountants on Accounting
               and Financial Disclosure...................................    14

                                    Part III

Item 10.       Directors and Executive Officers of the Registrant.........    15

Item 11.       Executive Compensation.....................................    15

Item 12.       Security Ownership of Certain Beneficial Owners and
               Management.................................................    15

Item 13.       Certain Relationships and Related Transactions.............    15

                                     Part IV

Item 14.       Exhibits, Financial Statement Schedules and Reports on
               Form 8-K...................................................    16


<PAGE>

                                     PART I


ITEM 1.   BUSINESS

GENERAL

DT Industries, Inc. (together with its subsidiaries,  the "Company" or "DTI") is
an  engineering-driven  designer,   manufacturer  and  integrator  of  automated
production equipment and systems used to manufacture,  test or package a variety
of industrial and consumer products.  The Company is the largest manufacturer of
integrated  assembly and test systems for discrete  parts, as well as integrated
tablet processing and packaging  systems in North America.  Although the Company
experienced declines in revenues and operating profits in the most recent fiscal
year,  growth  opportunities are believed to be provided by certain trends among
its customers,  including  increased emphasis on manufacturing  productivity and
flexibility,   concurrent   engineering   of  products  and  assembly   systems,
globalization  of  manufacturing  and  markets,   vendor   rationalization   and
outsourcing.  To  capitalize  on these  trends,  DTI has  implemented a business
strategy  to  provide,   develop  and  market  complementary   technologies  and
capabilities to supply customers with integrated processing,  assembly,  testing
and packaging systems for their products. As part of this strategy,  the Company
seeks to  cross-sell  the products  produced by  previously  acquired  companies
through its larger company-wide sales force providing for greater geographic and
customer coverage.

The Company  operates  in two  significant  business  segments:  Automation  and
Packaging.  Through acquisitions,  internal growth and product development,  the
Company's  Automation business grew from consolidated net sales of $51.1 million
in the  fiscal  year ended  June 26,  1994 to sales of $355.0  million in fiscal
1998. The Automation  segment's  sales dropped  significantly  in fiscal 1999 to
$299.8 million primarily from the lower revenues with a significant  electronics
customer.  The Company's  Packaging business grew from consolidated net sales of
$25.7  million in fiscal 1994 to a record high of $116.8  million in revenues in
fiscal 1998. The Packaging  segment's  sales were $109.5 million in fiscal 1999,
decreasing  primarily  from the  softness in the plastics  processing  equipment
markets and to a lesser extent production inefficiencies at its primary plastics
processing equipment facility. Sales from the Company's stamping and fabrication
businesses  were $32.9  million in fiscal 1999,  sharply  lower than fiscal 1998
revenues of $47.5  million,  primarily due to the sale of the Knitting  Elements
business  in May  1998 and the  softness  in  sales  to  agricultural  equipment
customers.

The Company  recorded  operating profit of $10.4 million in fiscal 1999 compared
to $62.6  million in fiscal  1998.  The lower  operating  profit  resulted in an
overall net loss for fiscal 1999 of $1.8 million. The operating  performance was
caused by the lower sales,  manufacturing  inefficiencies  and significant  cost
overruns on automation projects as discussed more fully in Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations.

AUTOMATION SEGMENT.  The Automation  segment,  which accounted for approximately
68% of the Company's  consolidated  fiscal 1999 net sales,  designs and builds a
complete line of integrated  automated assembly and testing systems.  Integrated
systems  combine  a  variety  of  manufacturing  technologies  into  a  complete
automated  manufacturing  system. Core capabilities of the Company's  Automation
segment   include    systems    integration,    medium/high    speed   indexing,
synchronous/non-synchronous   assembly,   flexible/reconfigurable,   high  speed
precision  assembly,   build-to-print,   material  handling,  cell  control/data
collection,  lean  manufacturing,  precision tools and dies, micron assembly and
automated  welding systems.  The Automation  segment's  products are used in the
electronics,   automotive,   consumer  products,  tire,  electrical  components,
appliance,  medical devices, hardware and many other industries.  The Company is
the largest  manufacturer  of integrated  assembly and test systems for discrete
parts in North America.

PACKAGING SEGMENT. The Packaging segment,  which accounted for approximately 25%
of the  Company's  consolidated  fiscal  1999  net  sales,  designs  and  builds
proprietary  machines  and  integrated  systems used to perform  processing  and
packaging tasks.  Core  capabilities of the Company's  Packaging segment include
the  design  and  manufacture  of  thermoforming,  blister  packaging  and  foam
extrusion  systems,  liquid  filling  systems  and a  complete  line  of  tablet
processing and packaging systems. The Packaging segment's products are primarily
used in the pharmaceutical,  nutritional,  cosmetics, consumer products and food
industries.  Sales of these products also produce a stream of recurring revenues
from replacement parts and service as the Company's  substantial  installed base
of equipment is maintained  and upgraded  over time.  The Company is the largest
manufacturer  of integrated  tablet  processing  and packaging  systems in North
America.


                                       1
<PAGE>

The following table summarizes the companies comprising each business segment:

<TABLE>
<CAPTION>
                                                ACQUISITION
                   COMPANY                         DATE                                BUSINESS
<S>                                          <C>                 <C>

Automation segment:

  Peer Division ("Peer")                     July 1992           Designer and manufacturer of resistance and
                                                                 arc welding systems and related parts

  Detroit Tool and Engineering               August 1992         Designer and manufacturer of integrated
  Company ("DTE")                                                manufacturing systems and custom equipment,
                                                                 including tools and dies

  Advanced Assembly                          August 1994         Designer, manufacturer and integrator of
  Automation, Inc. ("AAA")                                       automated production and testing systems

  Assembly Machines, Inc.("AMI")             January 1996        Manufacturer of high-speed assembly systems

  Mid-West Automatio Enterprises,            July 1996           Designer and manufacturer of integrated
  Inc. ("Mid-West")                                              precision assembly systems

  Hansford Manufacturing                     September 1996      Designer and manufacturer of integrated precision
  Corporation ("Hansford")                                       assembly systems

  Assembly Technology & Test, Inc.           July 1997           Designer, manufacturer and integrator of
  ("ATT"), previously Lucas Assembly &                           automated production and testing systems
  Test Systems

Packaging segment:

  Sencorp Systems, Inc. ("Sencorp")          August 1993         Designer and manufacturer of plastics processing
                                                                 and packaging equipment, systems and related parts

  Stokes-Merrill Division                    December 1993       Designer and manufacturer of rotary presses,
  ("Stokes-Merrill")                                             tablet counting equipment and related parts

  Lakso Division ("Lakso")                   February 1995       Designer and manufacturer of automated packaging
                                                                 machinery, systems and related parts

  Armac Industries, Co. ("Armac")            February 1995       Designer and manufacturer of plastics processing
                                                                 and packaging equipment

  Kalish Division ("Kalish")                 August 1995         Designer, manufacturer and integrator of liquid
                                                                 filling and tablet packaging systems

  Swiftpack Automation Limited               November 1995       Designer and manufacturer of packaging equipment,
  ("Swiftpack")                                                  primarily electronic counters

  Scheu & Kniss Division ("S&K")             August 1998         Manufacturer of tablet press replacement parts
                                                                 and rebuild services

  C.E. King Division                         July 1999           Designer and manufacturer of tablet packaging,
                                                                 liquid filling and capping equipment
</TABLE>

In July 1999, the Company  completed the acquisition of certain net assets of C.
E. King Ltd., a  manufacturer  of tablet  counting,  liquid  filling and capping
equipment located in Chertsey, England. The purchase price of approximately $2.1
million  was  financed  by  borrowings  under  the  Company's  revolving  credit
facility.  Annualized  sales of C. E.  King are  expected  to  approximate  $5.7
million.

The Company formed Vanguard  Technical  Solutions,  Inc. (VTS) in July 1999 as a
start-up  business.  VTS is a designed,  manufacturer  and  integrator of vision
guarded assembly and test systems located in Tucson, Arizona.

                                       2
<PAGE>

The  Company  is a  Delaware  corporation  organized  in  January  1993  and the
successor to Peer Corporation, Detroit Tool Group, Inc. ("DTG") and Detroit Tool
and Engineering Company.  Peer Corporation was organized in June 1992 to acquire
the Peer Division of Teledyne,  Inc. and the stock of DTG, the sole  stockholder
of DTE and DTMP.

The Company's principal executive offices are located at 1949 E. Sunshine, Suite
2-300, Springfield, Missouri 65804 and its telephone number is (417) 890-0102.


BUSINESS STRATEGY

The  long-term  business  strategy  of DTI is to  provide,  develop  and acquire
complementary  technologies and capabilities to supply customers with integrated
assembly,  testing and packaging  systems for their  products.  DTI's goal is to
become the premier  provider of  engineered  solutions.  The Company  expects to
achieve this goal by designing  and  delivering  on-time,  innovative  solutions
which meet or exceed our customers'  expectations while  continuously  improving
quality,  service and cost. Key elements of the Company's  strategy  include the
following:

Operational  Improvements.  The  Company  is focused  on  improving  operational
performance  through greater use of risk  assessment  techniques on custom build
opportunities,   higher  quality  and  more  detailed   project   proposals,   a
strengthening  of  the  skill  set  in  applications   engineering  and  project
management as well as an increased focus on working capital management.  A "Best
of Practices  Methodology" has been initiated to address most of the performance
objectives.  Management  and employees  are being  evaluated on the basis of the
improvement of identified financial and operational benchmarks,  both internally
and against industry competitors.

Restructuring  and Cost Reductions.  The Company took a restructuring  charge of
$2.5 million in fiscal 1999 as part of a program to reduce costs and  streamline
operations.  The charge  includes the closure of one  packaging  and  automation
facility and severance costs associated with headcount reductions and management
changes.  The Company will continue to pursue cost cutting  measures  throughout
its  businesses  with a goal of lowering  or  maintaining  the current  level of
selling,  general and administrative  expenses,  lowering indirect manufacturing
expenses and increasing profitability.

Cross-Selling.  Substantial cross-selling opportunities exist across the product
lines of the  Automation  and  Packaging  segments.  As the  Company  integrates
acquired  operations  and develops new product  lines,  it is able to expand its
product  offerings and customer  base. The Company  expects  renewed growth as a
result of new  opportunities  created through the awareness and expansion of its
customer base.

Product Line Expansion.  Through acquisitions,  product license arrangements and
strategic alliances,  the Company has increased and plans to continue to develop
its engineering capabilities and product offerings.  DTI's Packaging segment has
the capability to provide  customers with fully integrated tablet processing and
packaging  systems.  DTI's Automation segment has increased its assembly systems
capabilities  as more fully  described  in "Markets  and  Products"  below.  The
Company's objective is to provide customers with integrated automation solutions
and systems integration expertise, rather than single use equipment. The Company
also uses its engineering expertise and manufacturing  capability to develop new
products and technology for markets the Company  currently serves and to provide
entree into new markets.

Leverage  Engineering  and  Manufacturing  Capabilities.  Through  acquisitions,
product license arrangements and strategic alliances, the Company has increased,
its engineering  capabilities and product offerings.  The Company's  engineering
strategy is to satisfy the growing  demand for small,  medium and large complex,
integrated automation solutions by utilizing the versatile engineering expertise
of its  Automation  businesses.  DTI's  Packaging  segment has the capability to
provide customers with fully integrated tablet processing and packaging systems.
The  Company's  objective is to provide  customers  with  integrated  automation
solutions and systems integration  expertise,  rather than single use equipment.
The Company also uses its engineering expertise and manufacturing  capability to
develop new products and technology for markets the Company currently serves and
to  provide  entree  into new  markets.  The  Company  intends  to  utilize  its
manufacturing  capacity and engineering  capabilities fully by directing work to
facilities with specific  capabilities and manufacturing  strengths to best meet
the customer's needs.

International  Expansion.  The Company seeks to increase its international sales
through strategic alliances,  international agents,  foreign offices and agents.
The  Company  acquired  certain  assets  of  U.K.-based  C.E.  King in July 1999
including  a  network  of   international   agents  to  complement  the  current
international  operations  consisting of the United Kingdom-based  Swiftpack and
Canada-based  Kalish.  In fiscal 1997,  DTI's  Automation  segment  expanded its
international presence further by forming an alliance with a subsidiary of Claas
KGaA and opening a sales and service  office in Beelen,  Germany.  This alliance
also  allows the  Company to market  Claas  KGaA's  highly  regarded  automation
systems to the Company's  existing  customer base. The July 1997  acquisition of
ATT provided DTI's  Automation  segment a stronger  international  presence with
manufacturing  facilities  in the United  Kingdom  and  Germany,  as well as the
United  States.   International   sales  accounted  for   approximately  25%  of
consolidated net sales in fiscal 1999.


                                       3
<PAGE>

MARKETS AND PRODUCTS

AUTOMATION SEGMENT. The Automation segment designs and builds a complete line of
automated assembly and test systems, special machines and large complex dies for
a range  of  industries,  including  automotive,  tire,  recreational  products,
appliance, electronics, medical device, electrical components, hardware and many
others. The Company also manufactures  custom production  equipment for specific
customer applications, proprietary machines for specific industrial applications
and  integrated  systems  which may combine  features of custom and  proprietary
equipment.   Sales  from  the  Company's   Automation   segment   accounted  for
approximately  68%, 68% and 63% of consolidated  net sales for fiscal 1999, 1998
and 1997, respectively.

Integrated  Systems.  Integrated systems combine a wide variety of manufacturing
technologies into a complete automated manufacturing system.  Utilizing advanced
computers, robotics, vision systems and other technologies, the Company provides
a variety of  capabilities  including  systems  integration,  medium/high  speed
indexing,    synchronous/non-synchronous    assembly,    flexible/reconfigurable
assembly, high speed precision assembly, build-to-print, material handling, cell
control/data  collection,  lean manufacturing,  precision tools and dies, micron
assembly  and  automated  welding  systems  for  the  electronics,   automotive,
appliance,  electrical components,  medical device and hardware industries.  The
Company offers this variety of integrated systems for small or large,  custom or
standard  automation  applications.  The  standardized  automation  applications
utilize various machine  platforms and  proprietary  modular  building blocks in
carousel,  in-line, rotary and robotic assembly systems, all of which facilitate
time-sensitive,  concurrent  engineering  projects  where changes in tooling and
processes can occur in an advanced stage of system design.

Custom Machines.  The Company's custom machine  building  capabilities  include:
engineering,  project  management,  machining  and  fabrication  of  components,
installation of electrical controls, final assembly and testing. A customer will
usually approach the Company with a manufacturing  objective,  and DTI will work
with the customer to design,  engineer,  assemble, test and install a machine to
meet the  objective.  The  customer  often  retains  rights to the design  after
delivery of the machine  since the  purchase  contract  typically  includes  the
design of the machine;  however,  the  engineering and  manufacturing  expertise
gained in designing  and building the machine is often  reapplied by the Company
in projects for other customers.

Material Handling.  The Company builds an automated electrified monorail product
offered  in  various  capacity  ranges  from  lightweight   systems  to  systems
transporting  products weighing up to 8,800 pounds.  This product can be applied
to a variety of material handling applications ranging from delivery systems for
the food industry to  manufacturing  processes  involving  manual and automation
interfaces for engine assembly and testing. The benefits of this product include
providing a clean, quiet,  controlled  transport with the flexibility to operate
in a variety of processes and production rates.

Automated Resistance and Arc Welding Systems. The Company manufactures and sells
a line of standard  resistance  welding  equipment as well as special  automated
welding systems designed and built for specific applications. Marketed under the
brand  name  Peer(TM),  the  Company's  products  are  used  in the  automotive,
appliance and  electrical  industries to fabricate and assemble  components  and
subassemblies.  The Company's  resistance  welding equipment is also used in the
manufacture  of file  cabinets,  school  and  athletic  lockers,  store  display
shelves, metal furniture and material storage products.

Tooling and Dies. The Company  possesses  considerable  expertise in the design,
engineering and production of precision  tools and dies. In addition,  personnel
trained as tool and die makers  often apply their skills to the  manufacture  of
the Company's production machines.

PACKAGING SEGMENT. The Packaging segment designs and builds proprietary machines
and  integrated  systems  which are marketed  under  individual  brand names and
manufactured  for  specific  industrial  applications  using  designs  owned  or
licensed by the Company.  Although  these  machines are  generally  cataloged as
specific models,  they are usually modified for specific  customer  requirements
and often combined with other machines into integrated  systems.  Many customers
also request additional accessories and features which typically generate higher
revenues and enhanced profit  opportunities.  The Packaging  segment's  products
include  thermoformers,  blister packaging systems,  extrusion  systems,  rotary
presses and complete  integrated  packaging systems.  Packaging systems include:
bottle  unscrambling,  electronic and slat tablet  counting/filling,  cottoning,
sealing  and  capping,  labeling,  collating,  cartoning,  and  liquid  and tube
filling. The Company believes this equipment maintains a strong reputation among
its customers for quality,  reliability  and ease of operation and  maintenance.
The Company also sells  replacement  parts and  accessories  for its substantial
installed  base  of  machines.  Sales  from DTI's  Packaging  segment  accounted


                                       4
<PAGE>

for  approximately  25%, 23% and 25% of consolidated  net sales for fiscal 1999,
1998 and 1997, respectively.

Thermoformers.  A thermoformer heats plastic material and uses pressure and/or a
vacuum to mold it into a product.  Marketed under the brand names Sencorp(R) and
Armac(TM),  the Company's  thermoformers are used by customers in North America,
Europe  and Asia to form a variety  of  products  including:  specialized  cups,
plates  and food  containers,  trays  for food and  medical  products  and other
plastics applications.

The Company's  thermoformers  are sold  primarily to custom  formers who use the
machines to create  thermoformed items which are sold to a variety of end users.
The Company  also sells  thermoformers  directly to end users,  including  large
producers of electrical and healthcare products, cosmetics,  hardware, and other
consumer products.

The Company produces a line of thermoformers of different sizes,  heating ovens,
maximum draw depths and press capacities.  Certain thermoformers produced by the
Company  feature a fully  integrated  process  control  system to  regulate  the
thermoformer's  functions.  Depending  upon  the  customer's  requirements,  the
control system is capable of networking  with, or downloading to, the customer's
computers or other  equipment and the  Company's  service  center.  This on-line
diagnostic  capability  allows  the  Company to provide  real-time  service  and
support to its customers.

Blister  Packaging  Systems.  Blister packaging is a common method of displaying
consumer  products for sale in hardware stores,  convenience  stores,  warehouse
stores, drug stores and similar retail outlets. Batteries,  cosmetics,  hardware
items, electrical components,  razor blades and toys are among the large variety
of products sold in a clear plastic  blister or two-sided  package.  The Company
designs and  manufactures  machinery,  marketed under the brand names Sencorp(R)
and Armac(TM),  which performs blister packaging by heat-sealing a clear plastic
bubble, or blister,  onto coated  paperboard,  or by sealing two-sided  packages
using heat or microwave technology.

The Company's  blister  packaging systems are primarily sold to manufacturers of
the end products.  These customers,  with higher volume production requirements,
may use a thermoformer  in-line with a blister  sealer to form blisters,  insert
their product and seal the package in one continuous  process,  referred to as a
form/fill/seal configuration.  Customers having relatively low volume production
often use a stand-alone  blister  sealing  machine to seal products in a package
using blisters purchased from a custom former.

Extruders.  An extrusion  process is used to convert plastic resin and additives
into a continuous melt and to force such melt through a die to produce a desired
shape  that is then  cooled.  Marketed  under the  brand  name  Sencorp(R),  the
Company's  foam  extruders  are  used  to  produce  products  such  as  building
insulation,  display board,  meat trays,  bottle wrap protection  labels and egg
cartons.  The Company's  foam  extruders are  primarily  sold to large  plastics
companies that use the machines to create end products and sheet  products.  The
Company also  manufactures  reclaim extruders which process a variety of plastic
materials from ground form to finished pellet form.

Rotary  Presses.  The Company is the largest U.S.  designer and  manufacturer of
rotary tablet presses.  The Company designs and manufactures rotary presses used
by customers in the airbag, candy, food supplement, ceramic, ordnance, specialty
chemical, and pharmaceutical  industries to produce tablets.  Marketed under the
brand name Stokes(TM),  the Company's line of rotary presses  includes  machines
capable of producing  17,000  tablets per minute and other  machines  capable of
applying up to 40 tons of pressure.  Products  produced on the Company's  rotary
presses include Lifesavers(R), and Breathsavers(R) brand mints, Centrum(R) brand
vitamins and inflation pellets for automotive airbags.

The Company has an  agreement  with Horn & Noack  Pharmatechnick  GmbH,  for the
purpose of licensing German rotary press technology  designed  primarily for the
pharmaceutical  and  nutritional  markets.  The agreement  gives the Company the
exclusive  right to  manufacture  and  market  this press  technology  under the
Stokes(TM)  brand name in North and Central America and  non-exclusively  in the
rest of the world, excluding Europe. The Company is marketing the pharmaceutical
press through its Packaging segment.

Packaging Systems. The Company designs,  manufactures and distributes a complete
line of  products  utilized  for  packaging,  liquid  filling  or  tube  filling
applications.  The equipment  manufactured by the Company, which includes bottle
unscramblers,  slat counters,  electronic counters,  liquid fillers,  cottoners,
cappers and  labelers,  collators  and  cartoners,  can be sold as an integrated
system or individual units. These machines are marketed under the brand names of
Kalish(TM),  Lakso(R),  Merrill(R) and Swiftpack(TM) and are primarily delivered
to  customers  in the  pharmaceutical,  nutritional,  food,  cosmetic,  toy  and
chemical industries.


                                       5
<PAGE>

The  Company  benefits  from  a  substantial  installed  base  of  Lakso(R)  and
Merrill(R)  slat  counters  in the  aftermarket  sale of  slats.  Slat  counting
machines  use a set of slats to meter the number of tablets  or  capsules  to be
inserted  into  bottles.  Each  size or shape of tablet or  capsule  requires  a
different set of slats. In addition, the practice in the pharmaceutical industry
is to use a different set of slats for each product, even if the tablets are the
same size.

Laboratory Machines, Tooling, Parts and Accessories. The Company produces a line
of small scale blister sealers and a line of tablet  pressing  equipment used to
test new  materials and  techniques,  for quality  control,  laboratory or other
small run uses. The Company also sells parts and accessories for its proprietary
machines.  In addition,  the Company  designs and builds  special tools and dies
used in custom  applications of its  thermoforming  systems,  rotary presses and
slat counters.

OTHER BUSINESSES. The Company's other businesses produce precision-stamped steel
and aluminum components through its stamping and fabrication  operations for the
heavy trucking,  agricultural equipment,  appliance,  and electrical industries.
The Company's  stamping presses range in size from 32 tons to 1,500 tons, giving
the Company the flexibility to stamp flat rolled metal ranging in thickness from
 .015 inches to .750 inches.  Certain of the  Company's  presses can  accommodate
dies up to 190  inches in length to  perform  several  stamping  functions  in a
single press.


MARKETING AND DISTRIBUTION

The Company's  automation and packaging  machines and systems are sold primarily
through the Company's approximately 75 person direct sales force and to a lesser
extent through  manufacturers'  representatives and agents.  Sales of automation
and  packaging  machines and  integrated  systems  require the  Company's  sales
personnel to have a high degree of technical  expertise and extensive  knowledge
of the industry  served.  The Company's  sales force  consists of specialists in
each primary market in which the Company's automation and packaging machines and
systems  are sold.  Each  operating  unit has a sales force  experienced  in the
marketing of the equipment and systems historically  produced by each respective
business.  The  Company  believes  that  cross-selling  among the members of the
Automation and Packaging segments and integration of proprietary  technology and
custom  equipment  into  total  production   automation   systems  for  selected
industries provide the Company with expanded sales opportunities.

The Company's  automation and packaging machines and systems are sold throughout
the world by more than 80  manufacturers'  representatives  and sales  agents in
nearly 50 countries. The Company has sales and service offices in China, Canada,
England and Germany.  International sales were approximately 25% of consolidated
net sales for fiscal 1999 compared to 31% and 30% of  consolidated  net sales in
fiscal 1998 and fiscal 1997, respectively.


                                       6
<PAGE>

MANUFACTURING AND RAW MATERIALS

The  principal raw materials and  components  used in the  manufacturing  of the
Company's  automation and packaging  machines and systems  include carbon steel,
stainless  steel,  aluminum,   electronic  components,  pumps  and  compressors,
programmable logic controls, hydraulic components,  conveyor systems, visual and
mechanical sensors,  precision bearings and lasers. The Company is not dependent
upon any one supplier for raw materials or components used in the manufacture of
automation and packaging  machines and systems.  Certain  customers specify sole
source  suppliers  for  components  of custom  machines or systems.  The Company
believes there are adequate  alternative sources of raw materials and components
of sufficient quantity and quality.

AUTOMATION SEGMENT. Integrated systems to assemble and test various products are
designed and manufactured at the Company's facilities in Illinois, Michigan, New
York,  Ohio,  Pennsylvania,  the United Kingdom and Germany where  manufacturing
activity primarily consists of fabrication and assembly and, to a lesser extent,
machining.   The  facilities  in  Missouri  house  the  machining  and  assembly
operations  primarily used in the manufacture of tools and dies,  custom special
machines and certain other  integrated  systems.  A facility in Michigan and the
United Kingdom  manufacture the material handling  systems.  Another facility in
Michigan  houses  the  machining,  assembly  and  test  operations  used  in the
manufacture  of  welding  equipment  and  systems.  A  number  of  manufacturing
technologies  are  employed  at  these  facilities  including:   fabrication  of
stainless steel,  direct numerically  controlled  machinery,  computer generated
surface   modeling  of  contoured   components  and  fully   networked   CAD/CAM
capabilities.

PACKAGING  SEGMENT.  Special machines,  integrated systems and related parts for
the Company's  tablet  packaging and  liquid-filling  equipment are designed and
assembled at the Company's facilities in Massachusetts, Illinois, Canada and two
locations  in  the  United  Kingdom  from   components  made  to  the  Company's
specifications by unaffiliated  vendors.  Rotary presses and related replacement
parts  are  manufactured  and  are  assembled  at the  Company's  facilities  in
Pennsylvania  and  Kentucky.  Special  machines and  integrated  systems for the
plastics  packaging  industry  are  primarily   manufactured  at  the  Company's
manufacturing facility in Massachusetts which include machining, fabrication and
assembly.


FINANCIAL  INFORMATION  RELATING TO  BUSINESS  SEGMENTS,  FOREIGN  AND  DOMESTIC
OPERATIONS AND EXPORT SALES

The Company  operates  predominantly  in the  business  segments  classified  as
Automation and Packaging.  The Company's principal foreign operations consist of
manufacturing,  sales and service  operations in Canada,  the United Kingdom and
Germany.  For certain  other  financial  information  concerning  the  Company's
business segments, foreign and domestic operations and export sales, see Item 8.
Financial Statements and Supplementary Data.


CUSTOMERS

The majority of the Company's sales is attributable to repeat customers, some of
which have been  customers  of the Company or its acquired  businesses  for over
twenty years.  The Company  believes  such repeat  business is indicative of the
Company's  engineering  capabilities,  the quality of its  products  and overall
customer satisfaction.

The  Company's  five  largest   customers   during  fiscal  1999  accounted  for
approximately 26% of the Company's consolidated net sales.

Certain  purchasers  of the  Company's  automation  and  packaging  machines and
systems make advance and progress payments to the Company in connection with the
manufacture of machinery and systems.


BACKLOG

The  Company's  backlog  is based upon  customer  purchase  orders  the  Company
believes are firm. As of June 27, 1999, the Company had $180.0 million of orders
in backlog,  which compares to a backlog of  approximately  $224.8 million as of
June 28, 1998.


                                       7
<PAGE>

The  Automation  segment's  backlog was $138.4  million as of June 27,  1999,  a
decrease of $46.0 million from the prior year. The reduced backlog  reflects the
continued delays and deferrals of orders of automation systems from customers in
various  industries,  primarily  automotive  and lower orders from a significant
customer  in  the  electronics  industry.  Backlog  for  the  Packaging  segment
increased  $3.4 million,  or 9.6%, to $38.1 million due primarily to an increase
in the backlog of plastics processing equipment.

The level of backlog at any particular time is not necessarily indicative of the
future  operating  performance of the Company.  Additionally,  certain  purchase
orders are subject to  cancellation by the customer upon  notification.  Certain
orders are also subject to delays in  completion  and shipment at the request of
the  customer.  The Company  believes  most of the orders in the backlog will be
recognized as sales during fiscal 2000.


COMPETITION

The market for the Company's  automation  and packaging  machines and systems is
highly  competitive,  with a large number of companies  advertising  the sale of
production machines.  However, the market for automation and packaging machinery
and systems is fragmented and  characterized  by a number of industry  niches in
which few  manufacturers  compete.  The Company's  competitors  vary in size and
resources;  most are smaller  privately held companies or subsidiaries of larger
companies, some of which are larger than the Company; and none competes with the
Company in all product lines. In addition, the Company may encounter competition
from new market entrants.  The Company  believes that the principal  competitive
factors in the sale of the  Company's  automation  and  packaging  equipment and
systems are  quality,  technology,  on-time  delivery,  price and  service.  The
Company  believes  that it  competes  favorably  with  respect  to each of these
factors.


ENGINEERING; RESEARCH AND DEVELOPMENT

The  Company  maintains  engineering  departments  at all  of its  manufacturing
locations.  The  Company  employs  more than 325 people with  experience  in the
design of production equipment.  In addition to design work relating to specific
customer  projects,  the  Company's  engineers  develop new products and product
improvements designed to address the needs of the Company's target market niches
and to enhance the reliability,  efficiency, ease of operation and safety of its
proprietary machines.


TRADEMARKS AND PATENTS

The Company and its  subsidiaries  own and  maintain the  registered  trademarks
AssemblyFlex(R),   Fillit(R),   Force-Flo(R),   Force-Flo  Feeder(R),  Lakso(R),
Merrill(R),  Mid-West(R),  Mid-West  Automation(R),   Pacer(R),  Pharmaveyor(R),
Reformer(R), S&K(R), Sencorp(R),  Slat-Scan(R),  Vali-Tab(R) and Versa Press(R).
Registrations for Company  trademarks are also owned and maintained in countries
where such products are sold and such registrations are considered  necessary to
preserve the Company's proprietary rights therein.

The Company also has the rights to use the  unregistered  trademarks  Armac(TM),
F.A.S.T.(TM), Hartridge(TM), Kalish(TM), Peer(TM), Stokes(TM) and Swiftpack(TM).
All of the trademarks  listed above are used in connection with the machines and
systems marketed by the Automation and Packaging segments.

The Company  applies for and maintains  patents where the Company  believes such
patents are necessary to maintain the Company's interest in its inventions.  The
Company does not believe that any single  patent or group of patents is material
to either its Packaging business or its Automation business, nor does it believe
that the  expiration  of any one or a group of its patents would have a material
adverse  effect  upon its  business  or ability  to  compete  in either  line of
business.   The  Company   believes  that  its  existing  patent  and  trademark
protection,  however,  provides it with a modest  competitive  advantage  in the
marketing and sale of its proprietary products.


                                       8
<PAGE>

ENVIRONMENTAL AND SAFETY REGULATION

The  Company  is subject  to  environmental  laws and  regulations  that  impose
limitations on the discharge of pollutants  into the  environment  and establish
standards for the treatment, storage and disposal of toxic and hazardous wastes.
The Company is also  subject to the federal  Occupational  Safety and Health Act
and other state  statutes.  Costs of compliance with  environmental,  health and
safety requirements have not been material to the Company.

The  Company  believes  it  is  in  material   compliance  with  all  applicable
environmental and safety laws and regulations.


EMPLOYEES

At the end of August 1999, the Company had approximately  2,800 employees.  None
of the Company's employees are covered under collective  bargaining  agreements.
The Company has not  experienced  any work  stoppages in the last five years and
considers its relations with employees to be good.


                                       9
<PAGE>

ITEM 2.  PROPERTIES

     The  Company's  administrative  headquarters  are  located in  Springfield,
Missouri.  Set forth below is certain  information with respect to the Company's
manufacturing facilities.
<TABLE>
<CAPTION>
                                           Square
                                           Footage          Owned/
           Location                     (approximate)       Leased         Lease Expiration         Products
           --------                     -------------       ------         ----------------         --------
<S>                                       <C>               <C>            <C>                      <C>
AUTOMATION SEGMENT:

   Lebanon, Missouri                      300,000           Owned                                   Special machines, integrated
                                                                                                    systems, tools and dies

   Buffalo Grove, Illinois                205,000           Leased         July 31, 2003(1)         Integrated precision assembly
                                           20,000           Leased         February 28,             systems
                                                                           2000(2)

   Buckingham, England and                150,000           Owned                                   Integrated assembly and testing
      Gawcott, England                     40,000           Owned                                   systems

   Dayton, Ohio                           160,000           Leased         July 1, 2016(3)          Integrated assembly and testing
                                           23,000           Leased         August 1,2016            systems

   Rochester, New York                     87,000           Leased         Sept. 30, 2006 (3)       Integrated precision assembly
                                           26,000           Leased         July 31, 2002(3)         systems

   Livonia, Michigan                       86,000           Leased         July 1, 2000(4)          Integrated assembly and testing
                                           20,000           Leased         June 30, 2000(4)         systems

   Saginaw, Michigan                       83,000           Owned                                   Integrated assembly and testing
                                                                                                    systems

   Benton Harbor, Michigan                 70,500           Owned                                   Resistance and arc welding
                                                                                                    equipment and systems

   Erie, Pennsylvania                      56,000           Owned                                   High-speed assembly systems

   Neuweid, Germany                        33,000           Leased         September 13, 2003       Integrated assembly and testing
                                                                                                    systems

   Tucson, Arizona                         20,000           Leased         August 31, 2004(2)       Micron robotic assembly

PACKAGING SEGMENT:

   Hyannis, Massachusetts &               155,000           Owned                                   Plastics processing and
     Fall River, Massachusetts             37,000           Leased(7)                               packaging equipment

   Montreal, Quebec                        81,000           Leased         Aug. 14, 2017            Tablet packaging, liquid filling
                                                                                                    and tube filling equipment and
                                                                                                    systems

   Leominster, Massachusetts               60,000           Owned                                   Tablet packaging equipment and
                                                                                                    systems

   Louisville, Kentucky                    55,000           Owned                                   Tablet press parts and rebuild
                                                                                                    services

   Bristol, Pennsylvania                   43,000           Leased         May 31, 2000(1)          Rotary presses

   Niles, Illinois                         30,000           Leased         July 16, 2000(6)         Tablet counters

   Alcester, England                       22,000           Owned                                   Electronic counters

OTHER:

   Lebanon, Missouri                      200,000(5)        Owned                                   Metal products
</TABLE>

(1)  The Company has an option to renew such lease for one additional  five-year
     term.

(2)  The  Company has an option to renew such lease for one  additional  term of
     three years.

(3)  The Company has an option to renew such lease for two  additional  terms of
     five years.

(4)  The Company has an option to renew such lease for one  additional  two-year
     term.

(5)  Facility consists of two adjacent buildings of approximately 171,000 square
     feet and 29,000 square feet, respectively.

(6)  The  Company has an option to renew such lease for an  additional  two-year
     term and a second additional five-year term.

(7)  The Company shut down this facility in July 1999. Lease expires January 31,
     2000.

                                       10
<PAGE>

The Company  also leases  other  office,  warehouse  and service  facilities  in
Missouri, New Jersey, California, Canada, the United Kingdom, Germany and China.
The Company anticipates no significant  difficulty in leasing alternate space at
reasonable rates in the event of the expiration,  cancellation or termination of
a lease relating to any of the Company's leased properties. The Company believes
that  its  principal  owned  and  leased  manufacturing   facilities  will  have
sufficient   capacity  to  accommodate  future  internal  growth  without  major
additional capital improvements.


ITEM 3.  LEGAL PROCEEDINGS

Product  liability claims are asserted against the Company from time to time for
various injuries alleged to have resulted from defects in the manufacture and/or
design of the Company's  products.  At June 27, 1999,  there were 18 such claims
pending.  The Company does not believe that the resolution of such suits, either
individually  or in the  aggregate,  will have a material  adverse effect on the
Company's results of operations or financial condition. Product liability claims
are covered by the Company's comprehensive general liability insurance policies,
subject to certain deductible amounts.  The Company has established reserves for
such deductible amounts,  which it believes to be adequate based on its previous
claims experience. However, there can be no assurance that resolution of product
liability  claims in the future will not have a material  adverse  effect on the
Company.

In addition to product liability  claims,  from time to time, the Company is the
subject of legal  proceedings,  including  claims  involving  employee  matters,
commercial  matters and similar claims.  There are no material claims  currently
pending. The Company maintains  comprehensive  general liability insurance which
it believes to be adequate for the continued operation of its business.


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

None

                            ------------------------


INFORMATION REGARDING FORWARD-LOOKING STATEMENTS

Certain  information  contained in this  report,  particularly  the  information
appearing  in  Items  1, 3 and 7,  includes  forward-looking  statements.  These
statements  comprising all statements  herein which are not historical are based
upon the Company's  interpretation  of what it believes are significant  factors
affecting its businesses,  including many  assumptions  regarding future events,
and are made  pursuant  to the safe  harbor  provisions  of  Section  27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934,  as amended.  References  to  "opportunities",  growth  potential",
"objectives"  and  "goals",  the  words  "anticipate",   "believe",  "estimate",
"expect",  and similar  expressions  used herein  indicate such  forward-looking
statements. Actual results could differ materially from those anticipated in any
forward-looking  statements as a result of various factors,  including  economic
downturns in industries or markets served,  delays or  cancellations of customer
orders,  delays in shipping  dates of  products,  significant  cost  overruns on
certain  projects,  significant  restructuring  or other special,  non-recurring
charges,  foreign  currency  exchange  rate  fluctuations,  delays in  achieving
anticipated cost savings or in fully implementing  project  management  systems,
availability of credit at acceptable  terms,  and possible  future  acquisitions
that may not be  complementary  or additive.  Additional  information  regarding
certain  important  factors that could cause  actual  results of  operations  or
outcomes  of other  events to differ  materially  from any such  forward-looking
statement appears  elsewhere herein,  including in the text of Items 1, 3 and 7,
and  in  particular   under  the  headings   "Market  Risk",   "Seasonality  and
Fluctuations  in  Quarterly  Results",  Year 2000  Compliance"  and  "Cautionary
Statements Regarding Forward-Looking Statements" under Item 7.


                                       11
<PAGE>

                                     PART II


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

The  Company's  Common Stock is quoted on the Nasdaq  National  Market under the
symbol "DTII".  As of September 17, 1999, the number of record holders of common
stock was 84. Such record holders  include  several holders who are nominees for
an  undetermined  number of  beneficial  owners.  The Company  believes that the
number of beneficial owners of the shares of common stock issued and outstanding
at such date was approximately 2,600.

The following  table sets forth,  for the quarters  indicated,  the high and low
sales prices for the Common Stock as reported by The Nasdaq Stock Market and the
cash dividends per share declared during such periods.

                         Sales Prices                   Quarterly Cash
                     High           Low                   Dividends
                   ------------------------         ----------------------

FISCAL 1999
Fourth quarter     $10 7/16       $ 6 3/4                   $0.02
Third quarter       18 11/16        5 1/8                   $0.02
Second quarter      19             15                       $0.02
First quarter       24 7/8         14 7/8                   $0.02

FISCAL 1998
Fourth quarter     $39            $25 5/8                   $0.02
Third quarter       38 3/4         32 1/8                   $0.02
Second quarter      34 1/4         27 1/2                   $0.02
First quarter       35 3/4         27 15/16                 $0.02

In conjunction  with the September 1999  amendment to the credit  facility,  the
Company suspended payments of quarterly dividends.


                                       12
<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA
(In thousands, except per share data)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
                                                                          Fiscal year ended
                                             --------------------------------------------------------------------------
                                              June 27,        June 28,        June 29,        June 30,        June 25,
                                                1999            1998            1997            1996            1995
                                             ----------      ----------      ----------      ----------      ----------
<S>                                          <C>             <C>             <C>             <C>             <C>
STATEMENT OF OPERATIONS DATA

Net sales                                    $ 442,084       $ 519,342       $ 396,110       $ 235,946       $ 147,369

Cost of sales                                  348,487         380,126         285,044         172,568         109,678
                                             ----------      ----------      ----------      ----------      ----------
Gross profit                                    93,597         139,216         111,066          63,378          37,691

Selling, general and administrative
  expenses                                      80,740          75,246          54,367          35,445          21,428

Restructuring charge (Note 14)                   2,500             ---             ---             ---             ---

Loss on sale of assets of Knitting
  Elements division (Note 3)                       ---           1,383             ---             ---             ---
                                             ----------      ----------      ----------      ----------      ----------

Operating income                                10,357          62,587          56,699          27,933          16,263

Interest expense, net                            7,742           6,509          11,088           4,799           1,849

Dividends on Company-obligated,
  mandatorily redeemable convertible
  preferred securities of subsidiary
  DT Capital Trust holding solely
  convertible junior subordinated
  debentures of the Company                      5,012           5,012             251             ---             ---
                                             ----------      ----------      ----------      ----------      ----------

Income (loss) before income taxes and
  extraordinary loss                            (2,397)         51,066          45,360          23,134          14,414

Provision (benefit) for income taxes              (634)         20,182          18,979           9,643           5,964
                                             ----------      ----------      ----------      ----------      ----------
Income (loss) before extraordinary loss         (1,763)         30,884          26,381          13,491           8,450

Extraordinary loss, net(1)                         ---           1,200             324             ---             ---
                                             ----------      ----------      ----------      ----------      ----------
Net income (loss)                            $  (1,763)      $  29,684       $  26,057       $  13,491       $   8,450
                                             ==========      ==========      ==========      ==========      ==========
Diluted earnings (loss) per common
  share before extraordinary loss            $   (0.17)      $    2.49       $    2.41       $    1.50       $    0.94
                                             ==========      ==========      ==========      ==========      ==========
Diluted earnings (loss) per common share     $   (0.17)      $    2.40       $    2.38       $    1.50       $    0.94
                                             ==========      ==========      ==========      ==========      ==========
Diluted weighted average common shares
  outstanding                                   10,182          13,621          11,022           9,001           9,000
                                             ==========      ==========      ==========      ==========      ==========

BALANCE SHEET DATA

Working capital                              $ 103,056       $ 108,440       $  90,981       $  26,161       $  16,791

Total assets                                   456,787         460,002         395,196         233,843         159,263

Total debt                                     104,043          90,011          48,505          79,327          37,353

Company-obligated, mandatorily
  redeemable convertible preferred
  securities of subsidiary DT Capital
  Trust holding solely convertible
  junior subordinated debentures
  of the Company                                70,000          70,000          70,000             ---            ---

Stockholders' equity                           179,140         190,059         185,267          87,884         75,020

</TABLE>

1    Reflects costs incurred of $2,000,  less applicable  income tax benefits of
     $800 in the fiscal  year ended June 28,  1998 and costs  incurred  of $540,
     less  applicable  income tax benefits of $216 in the fiscal year ended June
     29, 1997,  related to the  extinguishment  and  refinancing  of debt by the
     Company.


                                       13
<PAGE>

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

See the information under the caption "Management's  Discussion and Analysis" on
pages 17 through 28.


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See the information under the caption "Market Risk" on pages 26 through 27.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the consolidated  financial statements and notes thereto on pages 29 through
49.


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

None


                                       14
<PAGE>

                                    PART III


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A definitive  proxy  statement is being filed with the  Securities  and Exchange
Commission on or about October 6, 1999. The information required by this item is
set  forth  under  the  caption  "Election  of  Directors",  under  the  caption
"Executive  Officers" and under the caption "Section 16(a) Beneficial  Ownership
Reporting  Compliance" in the definitive proxy statement,  which  information is
incorporated herein by reference thereto.


ITEM 11.  EXECUTIVE COMPENSATION

The information  required by this item is set forth under the caption "Executive
Compensation"  in  the  definitive  proxy   statement,   which   information  is
incorporated herein by reference thereto.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information  required by this item is set forth under the caption  "Security
Ownership of Certain  Beneficial  Owners and Management" in the definitive proxy
statement, which information is incorporated herein by reference thereto.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The  information  required by this item is set forth under the caption  "Certain
Transactions"  in  the  definitive  proxy   statement,   which   information  is
incorporated herein by reference thereto.


                                       15
<PAGE>

                                     PART IV


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

1.   Financial Statements                                                  Page

     Consolidated Balance Sheets as of June 27, 1999 and June 28, 1998      30

     Consolidated Statement of Operations for the Fiscal Years Ended
     June 27, 1999, June 28, 1998 and June 29, 1997                         31

     Consolidated Statement of Changes in Stockholders' Equity for the
     Fiscal Years Ended June 27, 1999, June 28, 1998 and June 29, 1997      32

     Consolidated Statement of Cash Flows for the Fiscal Years Ended
     June 27, 1999, June 28, 1998 and June 29, 1997                         33

     Notes to Consolidated Financial Statements                             35

2.   Financial Statement Schedule

     Report of Independent Accountants on Financial Statement Schedule     S-1

     Schedule VIII Valuation and Qualifying Accounts and Reserves
     for the Fiscal Years Ended June 28, 1998, June 29, 1997 and
     June 30, 1996                                                         S-2

All other  schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.

3.   Exhibits

The exhibits listed on the  accompanying  Index to Exhibits are filed as part of
this Report.

4.   Reports on Form 8-K

On May 6, 1999,  a Current  Report on Form 8-K was filed to report,  pursuant to
Item 5 thereof,  the release of the  Company's  earnings  for the three and nine
months ended March 28, 1999.

On July 23, 1999, a Current Report on Form 8-K was filed to report,  pursuant to
Item 5 thereof,  the release by the Company of its  expectation  of earnings for
the three and twelve months ended June 27, 1999.


                                       16
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS


OVERVIEW

DT  Industries,  Inc.  (DTI or the  Company)  was  formed  through  a series  of
acquisitions beginning with the initial acquisitions of Detroit Tool Group, Inc.
and  the  Peer  Division  of  Teledyne,   Inc.  in  1992.  Subsequent  to  those
transactions,   the   Company  or  its   subsidiaries   completed  a  number  of
acquisitions.  The  acquisitions  were  elements of a strategic  plan to acquire
companies with proprietary  products and  manufacturing  capabilities  which had
strong market and  technological  positions in the niche markets they served and
furthered the Company's  goal of providing  customers a full range of integrated
automated   systems.   The  Company  believes  that  emphasis  on  complementary
acquisitions  of companies  serving target markets has allowed it to broaden its
product  offerings  and to  provide  customers  a  single  source  for  complete
integrated  automation systems. The acquisitions  expanded the Company's base of
customers and markets,  creating greater  opportunities for cross-selling  among
the various divisions of the Company. As a result of poor operating  performance
in fiscal  1999,  the Company was  required to  negotiate  an  amendment  to its
existing $175 million multi-currency revolving and term credit facility. Part of
the terms of the amendment  included a reduction in the loan  commitment as well
as  restrictions  on  acquisitions.  As such, the Company's focus in fiscal 2000
will center on operational improvements to  increase profitability.  The Company
has  established  goals for fiscal 2000 which focus on  enhancing  profitability
through   cost-containment   measures,  the  right-sizing  of  operations,   the
implementation  of performance  metrics and the overall  continuous  improvement
programs.

The Company has made the  following  acquisitions  in the past three years which
affected the results of operations:

       July 1996              Mid-West Automation Enterprises, Inc. (Mid-West)

       September 1996         Hansford Manufacturing Corporation (Hansford)

       July 1997              Lucas Assembly and Test Systems (LATS), renamed
                              Assembly Technology & Test (ATT)

       August 1998            Scheu & Kniss

In July 1999, the Company  completed the acquisition of certain net assets of C.
E. King,  Ltd., a manufacturer  of tablet  counting,  liquid filling and capping
equipment located in Chertsey,  England.  The purchase price of $2.1 million was
primarily financed by borrowings under the Company's  revolving credit facility.
As the  transaction  occurred  subsequent to the end of fiscal 1999, the balance
sheet and results of  operations of C. E. King are excluded from the fiscal 1999
consolidated  balance  sheet and  results of  operations  of DTI.  The pro forma
effects of the  acquisition  of C. E. King assets on the  Company's  fiscal 1999
financial position are not material.


REVIEW OF FISCAL 1999 FINANCIAL RESULTS

Fiscal 1999 financial  results were  significantly  below prior year and planned
results.  Fiscal  1999 was  expected  to be a  transition  year as a result of a
significant  reduction  in  business  with our  largest  customer  as they  were
reducing  their  capital  spending  due to  adequate  capacity.  The Company had
planned to replace a significant  portion of this revenue decrease decrease with
orders from new customers.  However,  fiscal 1999 orders were $396.7 million, or
21% below the prior year.  Order activity  reflected not only the lower activity
of our largest  customer  but the  softness  in capital  spending in many of our
other key markets, including automotive, heavy equipment, agricultural equipment
and  appliance.  The  Company's  financial  results  were below the prior year's
results  throughout  the year due  primarily  to the lower sales  levels and the
resulting  unfavorable   manufacturing   efficiencies.   Selling,   general  and
administrative  expenses  increased as the Company  continued its pursuit of new
business and development of new products and technologies.

In the fourth  quarter of fiscal 1999,  the Company  reported a net loss of $7.1
million on sales of $113.5  million.  The fourth  quarter  results of operations
included  special charges of $13 million.  The special charges included a charge
of $9.8  million  to  cost of  goods  sold  related  to  cost,  performance  and
collection  issues on three automation  projects,  a $2.5 million  restructuring
charge  and a  $0.7  million  bad  debt  reserve  established  for a  receivable
currently being pursued in a legal action.  Excluding these special charges, the
Company  would have  recorded  approximately  $1.1  million of net income in the
fourth quarter versus $8.4 million for the prior year's fourth quarter.


                                       17
<PAGE>

The Company has taken various actions to contain costs and improve profitability
reflected  in the  restructuring  charge in the fourth  quarter.  These  actions
include management changes at under-performing  units,  reductions in work force
throughout  the  company and the closing of  underutilized  facilities.  Project
issues  which  lowered  earnings in fiscal 1999 have been  reviewed  and changes
implemented  in methods and controls in an effort to mitigate these risks in the
future.  The  Company has taken a very  conservative  view of fiscal 2000 with a
focus on cost control,  the right sizing of operations  and the  improvement  of
profitability.

For a better  understanding  of the  significant  factors  that  influenced  the
Company's  performance  during the past three years,  the  following  discussion
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto appearing elsewhere in this Annual Report.

The  Company  primarily  operates  in  two  business  segments,  Automation  and
Packaging.  The Automation segment designs and builds integrated systems for the
assembly,  test  and  handling  of  discrete  products.  The  Packaging  segment
manufactures tablet processing, counting and liquid filling systems and plastics
processing equipment including  thermoforming,  blister packaging,  heat sealing
and foam extrusion.


                                       18
<PAGE>

Set forth below is certain  financial  data relating to each  business  segment.
Prior  years'  data  has  been  restated  to  reflect  segment  presentation  in
accordance   with   Statement  of  Financial   Accounting   Standards  No.  131,
"Disclosures about Segments of an Enterprise and Related Information".
<TABLE>
<CAPTION>
                                                          Fiscal year ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
(in thousands)                               ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
NET SALES
   Automation                                $ 299,787       $ 355,052       $ 248,213
   Packaging                                   109,487         116,803         100,435
   Other                                        32,810          47,487          47,462
                                             ----------      ----------      ----------
      Total                                  $ 442,084       $ 519,342       $ 396,110
                                             ==========      ==========      ==========

GROSS PROFIT
   Automation                                $  53,385       $  90,275       $  64,720
      Gross margin                                17.8%           25.4%           26.1%

   Packaging                                    36,563          40,439          35,495
      Gross margin                                33.4%           34.6%           35.3%

   Other                                         3,649           8,502          10,851
      Gross margin                                11.1%           17.9%           22.9%
                                             ----------      ----------      ----------
         Total gross profit                  $  93,597       $ 139,216       $ 111,066
         Total gross margin                       21.2%           26.8%           28.0%
                                             ==========      ==========      ==========

OPERATING INCOME

   Automation                                $   5,573       $  47,436       $  39,629
      Operating margin                             1.9%           13.4%           16.0%

   Packaging                                    12,439          20,801          17,158
      Operating margin                            11.4%           17.8%           17.1%

   Other                                         1,765           3,391          6,966
      Operating margin                             5.4%            7.1%           14.7%

   Corporate                                    (9,420)         (9,041)         (7,054)
                                             ----------      ----------      ----------
      Total operating income                 $  10,357       $  62,587       $  56,699
      Total operating margin                       2.3%           12.1%           14.3%
                                             ==========      ==========      ==========

DEPRECIATION AND AMORTIZATION EXPENSE

   Automation                                $   9,426       $   8,714       $   6,327

   Packaging                                     3,595           2,793           2,564

   Other                                         1,496           1,491           1,258

   Corporate                                       947             752             904
                                             ----------      ----------      ----------
      Total                                  $  15,464       $  13,750       $  11,053
                                             ==========      ==========      ==========

CAPITAL EXPENDITURES

   Automation                                $   3,889       $   9,441       $   6,654

   Packaging                                     9,327           3,313             770

   Other                                         1,624           3,459           3,806

   Corporate                                     1,063           1,101             620
                                             ----------      ----------      ----------
      Total                                  $  15,903       $  17,314       $  11,850
                                             ==========      ==========      ==========

IDENTIFIABLE ASSETS

   Automation                                $ 272,816       $ 299,423       $ 240,396

   Packaging                                   155,573         128,616         116,941

   Other                                        21,325          25,170          34,812

   Corporate                                     7,073           6,793           3,047
                                             ----------      ----------      ----------
      Total                                  $ 456,787       $ 460,002       $ 395,196
                                             ==========      ==========      ==========
</TABLE>


                                       19
<PAGE>

The  percentage  of  completion  method of  accounting is used by the Company to
recognize revenues and related costs. Under the percentage of completion method,
revenues for customer  contracts are measured  based on the ratio of engineering
and  manufacturing  labor  hours  incurred to date  compared to total  estimated
engineering and  manufacturing  labor hours or, for certain customer  contracts,
the  ratio  of  total  costs  incurred  to date to total  estimated  costs.  Any
revisions in the  estimated  total costs or values of the  contracts  during the
course of the work are  reflected  when the facts  that  require  the  revisions
become known.

Costs and related  expenses to manufacture  the products are recorded as cost of
sales when the related revenue is recognized. Provisions for estimated losses on
uncompleted  contracts  are  made  in  the  period  in  which  such  losses  are
determined.

Gross  margin  may vary  from  year to year as a  result  of the  variations  in
profitability of contracts for large orders of automated  production  systems or
special  machines.  In  addition,  changes in the product mix in a given  period
affect gross margin.


RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage of net
sales  represented  by certain  items  reflected in the  Company's  consolidated
statement of operations:
<TABLE>
<CAPTION>
                                                          Fiscal year ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                            <C>             <C>             <C>
Net sales                                      100.0%          100.0%          100.0%

Cost of sales                                   78.8            73.2            72.0
                                             ----------      ----------      ----------
Gross profit                                    21.2            26.8            28.0

Selling, general and administrative
   expenses                                     18.3            14.5            13.7

Restructuring charge                             0.6             ---             ---

Loss on sale of assets of Knitting
   Elements division                             ---             0.2             ---
                                             ----------      ----------      ----------
Operating income                                 2.3            12.1            14.3

Interest expense                                 1.7             1.3             2.8

Dividends on Company-obligated,
   mandatorily redeemable convertible
   preferred securities of subsidiary
   DT Capital Trust holding solely
   convertible junior subordinated
   debentures of the Company                     1.1             1.0             0.1
                                             ----------      ----------      ----------
Income (loss) before provision for income
   taxes and extraordinary loss                 (0.5)            9.8            11.4

Provision (benefit) for income taxes            (0.1)            3.9             4.8
                                             ----------      ----------      ----------
Income (loss) before extraordinary loss         (0.4)            5.9             6.6

Extraordinary loss on debt refinancing           ---             0.2             0.1
                                             ----------      ----------      ----------
Net income (loss)                               (0.4)%           5.7%            6.5%
                                             ==========      ==========      ==========
</TABLE>


                                       20
<PAGE>

                       FISCAL 1999 COMPARED TO FISCAL 1998

Consolidated net sales decreased $77.2 million,  or 14.9%, to $442.1 million for
the year ended June 27,  1999 from  $519.3  million  for the year ended June 28,
1998. Net sales by segment were as follows (in millions):

               Twelve Months Ended     Twelve Months Ended
                  June 27, 1999           June 28, 1998           (Decrease)
               -------------------     -------------------     -----------------

Automation           $299.8                  $355.0                $(55.2)

Packaging             109.5                   116.8                  (7.3)

Other                  32.8                    47.5                 (14.7)
               -------------------     -------------------     -----------------
                     $442.1                  $519.3                $(77.2)
               ===================     ===================     =================

Excluding the  incremental  sales of $9.5 million from the acquisition of ATT in
July 1997,  Automation segment sales decreased $64.7 million,  or 18.2% from the
year  ended  June 28,  1998.  Decreased  Automation  segment  revenues  resulted
primarily from lower sales to the electronics  industry.  Sales to a significant
electronics  customer were down substantially in the year ended June 27, 1999 as
compared to the year ended June 28, 1998.  Soft order  activity  throughout  the
Automation  segment  during  fiscal  1999 due to  continued  delays  on  certain
projects also contributed to the decreased sales revenues  compared to the prior
year to customers in the appliance, automotive and heavy equipment industries.

Excluding the  incremental  sales of $5.5 million from the acquisition of S&K in
August 1998,  Packaging segment sales decreased $12.8 million, or 11.0% from the
year ended June 28,  1998  primarily  from lower  sales of  plastics  processing
equipment,  particularly foam extrusion systems to international  markets. Sales
of tablet counting and packaging systems to the  pharmaceutical  and nutritional
industries,  which had been strong throughout the first three quarters of fiscal
1999,  decreased during the fourth quarter resulting in sales slightly below the
prior year level.

The decreased  revenues from the Company's other businesses  reflect the sale of
the Knitting  Elements  business in May 1998 combined with  significantly  lower
sales of parts to agricultural equipment customers.  An economic downturn in the
agricultural  equipment  industry has resulted in the  decreased  revenues  from
sales of precision metal stampings and fabrications to several customers serving
this market.  Also,  certain other customers of the precision metal stamping and
fabricating  business have been eliminated through planned attrition and product
changes.  These decreases were partially  offset by strong sales to customers in
the transportation industry.

Gross profit  decreased  $45.6 million,  or 32.8%, to $93.6 million for the year
ended June 27, 1999 from $139.2  million for the year ended June 28,  1998.  The
gross margin decreased to 21.2% from 26.8% due to substantial  losses on certain
assembly  systems and welding  systems  projects  reflecting  cost  overruns and
production difficulties,  manufacturing  inefficiencies resulting from the lower
volume of  manufacturing  activity  and  unfavorable  product mix changes in the
Company's  customer  base as  compared  to the  prior  year.  Based on facts and
circumstances occurring or culminating in the fourth quarter of fiscal 1999, the
Company  recorded  a charge of $9.8  million to cost of goods sold in the fourth
quarter related to three automation projects to revise cost estimates to reflect
additional   costs   anticipated   to  bring  the   projects   up  to   contract
specifications,  to  reflect  anticipated  final  billings  to  recoup  costs of
modifications  incurred  during  the  production  process,  and  on  one  of the
projects,  to reflect  warranty  costs  expected  to support  the  manufacturing
systems through the initial year of production.

Decreased  margins in the Packaging segment reflect cost overruns and production
inefficiencies,  primarily  during  the first six  months  of  fiscal  1999,  on
plastics  processing  equipment.  This decrease was partially offset by improved
margins on sales of tablet  counting  and  packaging  machinery.  Margins of the
Company's  metal  stamping  and  fabrication  business  declined  due  to  lower
manufacturing  efficiencies  resulting  from the  lower  level of  manufacturing
activity and unfavorable product mix issues compared to the prior year.

SG&A expenses  increased  $5.5  million,  or 7.3%, to $80.7 million for the year
ended June 27, 1999 from $75.2  million for the year ended June 28, 1998. As the
Company continued to focus on sales and marketing efforts in order to extend its
customer  base,  the  sales  force  was  expanded   contributing   to  increased
expenditures  for travel and quoting  costs.  The Company has also increased its
participation in trade shows and other industry events. Research and development
activities were also increased  during fiscal 1999 as compared to the prior year
in order to bolster the Company's technological position and create new products
and services.  The Company also took a charge of $0.7 million to SG&A expense in


                                       21
<PAGE>

the fourth  quarter of fiscal 1999  related to a  receivable  that is  currently
being pursued in a legal action. As a percentage of consolidated net sales, SG&A
expenses  increased  to 18.3% from 14.5% in fiscal  1998.  The Company has taken
steps to maintain current levels of SG&A expenses.

During the fourth quarter of fiscal 1999, the Company  recorded a  restructuring
charge of $2.5 million for severance costs  associated  with management  changes
and workforce reductions,  idle facility costs resulting from the lower level of
order  activity and non-cash asset  writedowns.  The charge  includes  severance
costs of $1.7 million,  idle facility  costs of $0.4 million and $0.4 million of
asset writedowns and other charges. The Company has utilized $0.4 million of the
reserve as of June 27, 1999  resulting  in a remaining  reserve of $2.1  million
which is expected to be used during fiscal 2000. The Company continues to review
current  operations  with a goal of  further  cost  cuts and other  measures  to
streamline operations and enhance profitability.

Operating  income  decreased  $52.2 million,  or 83.4%, to $10.4 million for the
year ended June 27, 1999 from $62.6 million for the year ended June 28, 1998, as
a result of the factors noted above. The operating margin decreased to 2.3% from
12.3%,  excluding the effect of a $1.4 million  non-recurring,  non-cash  charge
related to the sale of the Company's non-core Knitting Elements division, in the
prior year.

Interest expense increased to $7.7 million for the year ended June 27, 1999 from
$6.5 million for the year ended June 28, 1998. The increase in interest  expense
primarily  reflects  the  increased  level of debt  associated  with  the  stock
repurchase  program and the August 1998 acquisition of S&K. The stock repurchase
program was terminated in September 1999.

The Company paid $5.0 million of dividends on the Company-obligated, mandatorily
redeemable  convertible  preferred  securities  of  subsidiary  DT Capital Trust
holding  solely  convertible  junior  subordinated  debentures  of  the  Company
(Convertible  Preferred  Securities)  for the years ended June 27, 1999 and June
28,  1998.  Effective  September  1999,  the Company  elected to defer  interest
payments  on  the  convertible  junior  subordinated  debentures.  As a  result,
quarterly  distributions  on the Convertible  Preferred  Securities will also be
deferred.

Income before extraordinary loss decreased $32.7 million for the year ended June
27, 1999 from $30.9  million for the year ended June 28, 1998 to a loss of ($1.8
million). An extraordinary loss was recognized in fiscal 1998 for costs incurred
of $2.0 million, less applicable income tax benefits of $0.8 million, related to
the  refinancing  of debt in July 1997.  Basic and diluted loss per share before
the extraordinary  loss were $0.17 for the year ended June 27, 1999 versus basic
and diluted  earnings per share of $2.73 and $2.49,  respectively,  for the year
ended June 28, 1998.  Basic  weighted  average shares  outstanding  for the year
ended June 27, 1999 were 10.1  million  versus  11.3  million for the year ended
June 28, 1998.  The decrease  reflects the purchase of 1.4 million shares of the
Company's stock since May 1998.  Diluted weighted average shares outstanding for
the year ended June 27, 1999 were 10.2 million  versus 13.6 million for the year
ended  June  28,  1998.  The  decrease   primarily  reflects  the  exclusion  of
antidilutive convertible securities and the repurchase of the Company's stock.


                                       22
<PAGE>

                       FISCAL 1998 COMPARED TO FISCAL 1997

Consolidated net sales increased $123.2 million, or 31.1%, to $519.3 million for
the year ended June 28,  1998,  from $396.1  million for the year ended June 29,
1997. Net sales by segment were as follows (in millions):

               Twelve Months Ended     Twelve Months Ended
                  June 28, 1998           June 29, 1997           (Increase)
               -------------------     -------------------     -----------------

Automation           $355.0                  $248.2                 $106.8

Packaging             116.8                   100.4                   16.4

Other                  47.5                    47.5                    ---
               -------------------     -------------------     -----------------
                     $519.3                  $396.1                 $123.2
               ===================     ===================     =================

Of  the  $123.2  million  increase  in  sales,  $107.4  million  was  due to the
incremental  sales of recently  acquired  businesses  offset by the reduction in
sales from the disposition of the Knitting Elements division, with the remaining
$15.8 million,  or 4.0%,  relating to increased sales from existing  businesses.
Recently acquired businesses included Hansford in September 1996 and ATT in July
1997. The increase in sales by the Automation  segment was due to $108.9 million
in  incremental  sales  from  recently  acquired  businesses  offset by a slight
decrease in sales from existing businesses.  The decrease was the result of less
sales of automated assembly and test systems reflecting  decreased revenues from
certain customers in the electronics  industry partially offset by the growth in
sales of welding systems, custom build-to-print machines and sales of systems to
customers in the automotive  industry.  Packaging segment sales increased due to
the growth in sales of packaging systems,  including thermoforming and extrusion
systems and liquid and tablet packaging lines.

Gross profit  increased $28.1 million,  or 25.3%, to $139.2 million for the year
ended June 28, 1998,  from $111.1 million for the year ended June 29, 1997, as a
result of the sales increases  discussed  above.  The gross margin  decreased to
26.8% from 28.0%,  primarily as a result of the effects of acquired  businesses.
Gross margin  exclusive  of acquired  operations  decreased to 27.7%,  primarily
reflecting  the decline in the gross  margin of the  Company's  precision  metal
stamping and fabrication business.

SG&A expenses  increased $20.8 million,  or 38.4%, to $75.2 million for the year
ended June 28,  1998 from $54.4  million for the year ended June 29,  1997.  The
increase was primarily due to recently acquired  businesses,  with the remaining
increase  the  result  of  personnel  additions,   increased  costs  related  to
compensation and incentive programs,  professional fees,  commissions and travel
costs,  most  of  which  related  to the  overall  growth  of the  Company.  The
additional  professional  fees  pertained to the  selection of the core business
system and various tax and human resource consulting  projects.  As a percentage
of consolidated net sales, SG&A expenses increased to 14.5% from 13.7%.

On May 1, 1998, the Company sold substantially all of the assets of its non-core
Knitting  Elements  division for $9.4  million.  DTI  incurred a  non-recurring,
non-cash  operating charge of $1.4 million related to the sale. The loss, net of
the estimated tax benefit, lowered diluted earnings per share by $0.06.

Operating income increased $5.9 million, or 10.4%, to $62.6 million for the year
ended June 28, 1998 from $56.7  million for the year ended June 29,  1997,  as a
result of the factors noted above.  Excluding the Knitting Elements divestiture,
the operating margin decreased to 12.3% from 14.3% in the prior year as a result
of the lower  operating  margins of  recently  acquired  businesses  and factors
discussed above.

Interest expense decreased to $6.5 million for the year ended June 28, 1998 from
$11.1 million for the year ended June 29, 1997. The decrease in interest expense
is the result of the public  offering  of common  stock in  November  1996,  the
Convertible  Preferred  Securities offering in June 1997 and operating cash flow
in fiscal 1998 which allowed the Company to retire debt.

Income before  extraordinary  loss increased to $30.9 million for the year ended
June 28, 1998 from $26.4 million for the year ended June 29, 1997 as a result of
the factors noted above.  The Company  recognized  extraordinary  losses of $2.0
million and $0.5 million,  less  applicable  income tax benefits of $0.8 million
and $0.2 million, respectively, relating to the refinancing of debt in July 1997
and July 1996, respectively.

Basic and diluted  earnings per share before the  extraordinary  loss were $2.73
and  $2.49,  respectively,  for the year ended June 28,  1998  versus  $2.55 and
$2.41,  respectively  for the year ended June 29, 1997.  Basic weighted  average
shares  outstanding  for the year ended June 28, 1998 were 11.3  million  versus


                                       23
<PAGE>

10.3  million for the year ended June 29, 1997.  The  increase is primarily  the
result of the 2.25 million shares of common stock issued in a public offering in
November 1996.  Diluted weighted  average shares  outstanding for the year ended
June 28, 1998 were 13.6 million  versus 11.0 million for the year ended June 29,
1997. The increase  reflects the 2.25 million shares of common stock issued in a
public  offering in November 1996 and the assumed  conversion of the Convertible
Preferred Securities.


LIQUIDITY AND CAPITAL RESOURCES

Net cash provided by operating  activities was  approximately  $28.2 million and
$43.8 million during fiscal 1999 and 1998, respectively. During fiscal 1997, net
cash used by operating  activities was  approximately  $0.7 million.  Net income
(loss) plus non-cash operating charges provided $13.0 million, $47.0 million and
$40.3  million  of  operating   cash  flow  in  fiscal  1999,   1998  and  1997,
respectively.

Working  capital  balances  decreased  $15.2  million  during  fiscal  1999  due
primarily to a significant  decrease in accounts  receivable  from June 28, 1998
partially offset by an unfavorable change in inventory balances primarily in the
Packaging segment. The decrease in accounts receivable,  which relates primarily
to the Automation segment, reflects the lower level of manufacturing activity in
the fourth quarter of fiscal 1999 versus the  comparable  period in 1998 and the
Company's  increased  efforts  throughout  fiscal  1999 to  collect  outstanding
receivables.  Inventories of plastics processing  equipment have risen to a more
constant  level  after  strong  shipments  late in  fiscal  1998  had  decreased
inventories  to below  normal  amounts.  The Company  also began  stocking  some
standard  packaging  machinery  during  fiscal  1999 to  reduce  lead  times and
maintain manufacturing efficiencies.

For the fiscal  year ended  June 28,  1998,  net  increases  in working  capital
balances used  operating cash of $3.2 million.  The increase in working  capital
from June 29, 1997  reflects  the growth in the  packaging  systems  businesses,
primarily  contributing  to an increase in  inventory  and costs and earnings in
excess of amounts  billed.  These  increases were partially  offset by the lower
level of  manufacturing  activity  related  to  certain  electronics  customers,
contributing to the overall decrease in accounts receivable.

In fiscal 1997,  working capital balances  increased $41.0 million primarily due
to a $26.5 million  increase in accounts  receivable and a $7.2 million increase
in  inventory.   These   increases  were  driven  by  the  increased   level  of
manufacturing  activity and a trend toward  larger  dollar value and longer lead
time  projects as well as the strong  level of  shipments in the final months of
the year.

Working capital balances can fluctuate significantly between periods as a result
of the  significant  costs  incurred on individual  contracts and the relatively
large  amounts  invoiced  and  collected  by the  Company  for a number of large
contracts,  and the amounts and timing of customer advances or progress payments
associated with certain contracts.

During the year ended June 27, 1999,  the Company  borrowed  $7.7 million on its
revolving credit facility and raised another $6.5 million  primarily through the
issuance of Bonds, as discussed below.  These funds were combined with the $28.2
million of cash generated from operations and used to finance the acquisition of
Scheu & Kniss for $10.4  million,  repurchase  $10.0  million  of the  Company's
stock,  pay dividends of $0.8 million and finance capital  expenditures of $15.9
million.  The Company  purchased 1.4 million shares of its stock at a total cost
of $34.4 million under the stock  repurchase  program since May 1998.  The stock
repurchase program was terminated in September 1999.

In November  1998,  DTI made an  additional  payment to the sellers of Kalish as
determined  by formulae  based on the  earnings of the  acquired  business.  The
additional  purchase  price  specified  within  the Kalish  agreement,  based on
earnings from the  acquisition  date to June 28, 1998,  amounted to $3.0 million
and was paid through a combination of stock and cash. This  additional  purchase
price was  recorded  as  goodwill.  One of the  directors  of the  Company was a
controlling shareholder of Kalish prior to its acquisition by the Company.

On July 27, 1998, the Company's wholly-owned subsidiary,  Sencorp Systems, Inc.,
participated  in the  issueance  of $7.0  million  of  Massachusetts  Industrial
Finance Agency  Multi-Mode  Industrial  Development  Revenue Bonds 1998 Series A
(Bonds) to fund the  planned  expansion  of the  Company's  facility in Hyannis,
Massachusetts.  The Bonds  mature  July 1, 2023 and bear  interest at a floating
rate determined  weekly by Bank Boston,  the bond remarketing  agent. The weekly
rate is the lowest per annum  rate which  would  allow the bonds to be sold at a
price equal to 100% of the  outstanding  principal  plus accrued  interest.  The
interest  rate,  which is not  permitted to rise above 12%, was 3.65% as of June
27,  1999.  The  proceeds  from the Bonds are held in trust until needed for the
expansion.  Approximately  $5.2 million


                                       24
<PAGE>

has been  received  from the Bonds as of June 27,  1999.  The Company was not in
compliance with certain  financial  covenants in one of the bond documents as of
June 27, 1999.  In  September  1999,  the Company  completed an amendment to the
relevant bond document,  providing, among other things, for the permanent waiver
of the  covenant  defaults as of June 27,  1999,  the  establishment  of revised
financial  covenants  and  other  requirements,   including  the  furnishing  of
additional collateral.

In May 1999, the Company's  Board of Directors  authorized  purchases of up to 2
million shares of the Company's common stock. Through June 27, 1999, the Company
has repurchased 1,401,100 shares of its common stock at a total cost of $34,430.
The  repurchased  shares are being used for employee stock option  programs.  In
conjunction  with the  negotiations  of the amended  credit  facility  discussed
below, the Company has agreed that it will make no further repurchases of common
stock.  As a result,  the stock  repurchase  program was terminated in September
1999. No purchases of the Company's  common stock were made under the repurchase
plan after June 27, 1999.

On July 21, 1997, the Company  replaced the Second  Amended and Restated  Credit
Facilities  Agreement and the foreign  currency  denominated  term facility then
outstanding  with  a $175  million  multi-currency  revolving  and  term  credit
facility. The multi-currency  facility provides a $10 million Canadian term loan
and a $165 million revolving credit facility,  which includes an approximate $80
million sub-limit for multi-currency  borrowings in Pounds Sterling and Deutsche
Marks.  Borrowings under the  multi-currency  facility bear interest at floating
rates based on the agent bank's base rate or LIBOR (at the option of DTI) plus a
specified  percentage  based on the ratio of funded debt to operating  cash flow
and the ratings of DTI's corporate debt. At June 27, 1999, interest rates on the
multi-currency  credit  facility  ranged from 3.21% to 7.75%.  The  agreement is
secured by the capital stock of each of the  significant  domestic  subsidiaries
and 65% of the capital stock of each significant  foreign  subsidiary of DTI. In
conjunction  with entering into the credit facility,  the Company  recognized an
extraordinary loss in July 1997 of $1.2 million attributable to the write-off of
$2.0 million of unamortized deferred financing fees, net of related $0.8 million
tax benefit.

The Company was not in compliance with certain  financial  covenants  within the
credit agreement as of June 27, 1999. In September 1999 the Company completed an
amendment  to the credit  facility.  The total line of credit as amended is $135
million,  including a $125 million  revolving  credit facility and a $10 million
term credit  facility.  The  facility  will be  increased to $140 million if the
Company meets certain operating cash flow targets during the first six months of
fiscal 2000.  Borrowings under the amended credit facility will bear interest at
floating  rates  based on the prime  rate  plus 1 7/8% or LIBOR  plus 3% (at the
option of DTI). The credit facility,  as amended,  will mature on April 2, 2001.
Borrowings  under the amended credit  facility will be secured by  substantially
all of the assets of DTI and its  domestic  subsidiaries.  The  amendment to the
credit facility  provides a permanent waiver of the events of default as of June
27, 1999 and  establishes  a revised set of financial  and other  covenants  and
restrictions,  including  prohibitions of acquisitions  and payment of dividends
without the consent of the lenders.

On June 12, 1997,  the Company  completed a private  placement to  institutional
investors of  1,400,000  7.16%  Convertible  Preferred  Securities  (liquidation
preference of $50 per Convertible  Preferred  Security).  The placement was made
through the  Company's  wholly owned  subsidiary,  DT Capital Trust  (Trust),  a
newly-formed   Delaware  business  trust.  The  securities  represent  undivided
beneficial  ownership interests in the Trust. The sole asset of the Trust is the
$72.2  million  aggregate  principal  amount  of the  7.16%  Convertible  Junior
Subordinated  Deferrable  Interest  Debentures Due 2012 which were acquired with
the proceeds  from the offering as well as the sale of Common  Securities to the
Company.  The Company's  obligations under the Convertible  Junior  Subordinated
Debentures,  the Indenture  pursuant to which they were issued,  the Amended and
Restated  Declaration  of Trust of the Trust  and the  Guarantee  of DTI,  taken
together, constitute a full and unconditional guarantee by DTI of amounts due on
the Convertible Preferred  Securities.  The Convertible Preferred Securities are
convertible  at the option of the  holders at any time into the common  stock of
DTI at an effective  conversion  price of $38.75 per share and are redeemable at
DTI's  option after June 1, 2000 and  mandatorily  redeemable  in 2012.  The net
proceeds of the  offering of  approximately  $67.8  million  were used by DTI to
retire  indebtedness.  A  registration  statement  relating  to  resales of such
Convertible  Preferred  Securities was declared  effective by the Securities and
Exchange Commission on September 2, 1997.

In conjunction  with the  negotiation of the amendment to the credit facility in
September  1999,  the  Company  elected  to  defer  interest   payments  on  the
Convertible Junior Subordinated Debentures. The amended credit facility requires
that such  deferral  continue  until the maturity of the credit  facility.  As a
result,  quarterly  distributions on the Convertible  Preferred  Securities will
also be deferred and DTI will not declare or pay dividends on its common stock.


                                       25
<PAGE>

During  fiscal 1997,  the Company  also  completed  the public  offering of 2.25
million shares of its common stock at a price to the public of $34.50 per share,
raising $73.5 million after deducting  issuance costs. The proceeds  received by
the Company from the offering were used to reduce indebtedness.

In July 1999, the Company completed the acquisition of certain of the net assets
of C. E. King,  Ltd., a  manufacturer  of tablet  counting,  liquid  filling and
capping  equipment  located in Chertsey,  England.  The  purchase  price of $2.1
million was  primarily  financed by  borrowings  under the  Company's  revolving
credit  facility.  As the transaction  occurred  subsequent to the end of fiscal
1999,  the balance  sheet and results of operations of the C. E. King assets are
excluded  from the  fiscal  1999  consolidated  balance  sheet  and  results  of
operations of DTI. The pro forma effects of the acquisition of C. E. King assets
on the Company's fiscal 1999 financial position are not material.

Capital expenditures were $15.9 million in fiscal 1999.  Management  anticipates
that  capital  expenditures  for fiscal 2000 will range from  approximately  $10
million to $12 million.  This includes recurring replacement or refurbishment of
machinery and equipment and purchases to improve production methods or processes
or to expand  manufacturing  capabilities.  Funding for capital  expenditures is
expected  to be  provided  by cash from  operating  activities  and  through the
Company's credit facilities.

The Company paid  quarterly  cash  dividends of $0.02 per share on September 15,
1998,  December 15, 1998,  March 15, 1999 and June 15, 1999 to  stockholders  of
record on August 31, 1998,  November 30, 1998,  March 5, 1999, and May 31, 1999,
respectively. The future payment of quarterly dividends has been suspended.

Based on its ability to generate funds from  operations and the  availability of
funds under its current  credit  facilities,  the Company  believes it will have
sufficient  funds available to meet its currently  anticipated  operating,  debt
service and capital expenditure requirements.


BACKLOG

The  Company's  backlog  is based upon  customer  purchase  orders  the  Company
believes are firm. As of June 27, 1999, the Company had $180.0 million of orders
in backlog,  which compares to a backlog of  approximately  $224.8 million as of
June 28, 1998.

Automation segment backlog was $138.4 million as of June 27, 1999, a decrease of
$46.0 million from the prior year.  The reduced  backlog  reflects the continued
delays and deferrals of orders of automation  systems from  customers in various
industries,  primarily automotive,  and lower orders from a significant customer
in the electronics  industry.  Backlog for the Packaging  segment increased $3.4
million,  or 9.6%,  to $38.1 million due primarily to an increase in the backlog
of plastics processing equipment.

The level of backlog at any particular time is not necessarily indicative of the
future  operating  performance of the Company.  Additionally,  certain  purchase
orders are subject to  cancellation by the customer upon  notification.  Certain
orders are also subject to delays in  completion  and shipment at the request of
the  customer.  The Company  believes  most of the orders in the backlog will be
recognized as sales during fiscal 2000.


FOREIGN OPERATIONS

The Company's primary foreign  operations are conducted through its subsidiaries
in Canada,  the United Kingdom and Germany.  The functional  currencies of these
subsidiaries  are the  currencies  native to the  specific  country in which the
subsidiary is located.  Foreign  operations  accounted for  approximately  $89.1
million,  $91.9  million and $28.0  million of the Company's net sales in fiscal
1999,  1998 and 1997,  respectively.  Earnings from operations for the Company's
foreign  operations were $11.1 million,  $8.8 million and $5.4 million in fiscal
1999, 1998 and 1997, respectively.

MARKET RISK

In the ordinary course of business,  the Company is exposed to foreign  currency
and interest rate risks. These exposures  primarily relate to having investments
in assets  denominated in foreign  currencies and to changes in interest  rates.
Fluctuations in currency exchange rates can impact operating results,  including
net sales and  operating  expenses.  The Company  hedges  certain of its foreign
currency  exposure by  borrowing in the local  functional  currency in countries
where the Company has significant


                                       26
<PAGE>

assets  denominated  in  foreign  currencies.  Such  borrowings  include  Pounds
Sterling,  Canadian dollars and Deutsche Marks in the United Kingdom, Canada and
Germany,  respectively  (see Liquidity and Capital  Resources).  The Company may
utilize derivative financial  instruments,  including forward exchange contracts
and swap agreements, to manage certain of its foreign currency and interest rate
risks that it  considers  practical  to do so.  The  Company  holds no  material
derivative  financial  instruments  at June 27, 1999. The Company does not enter
into derivative  financial  instruments for trading purposes.  Market risks that
the  Company  currently  has  elected  not  to  hedge  primarily  relate  to its
floating-rate debt.


SEASONALITY AND FLUCTUATIONS IN QUARTERLY RESULTS

In general,  the  Company's  business is not subject to seasonal  variations  in
demand for its products.  However,  because  orders for certain of the Company's
products can be several million dollars,  a relatively  limited number of orders
can  constitute  a meaningful  percentage  of the  Company's  revenue in any one
quarterly  period.  As a result,  a relatively  small  reduction or delay in the
number of orders can have a material  impact on the timing of recognition of the
Company's  revenues.  Certain of the  Company's  revenues are derived from fixed
price  contracts.  To the  extent  that  original  cost  estimates  prove  to be
inaccurate,  profitability from a particular contract may be adversely affected.
Gross margins may vary between  comparable periods as a result of the variations
in  profitability  of contracts for large orders of special  machines as well as
product  mix  between  the  various  types of custom and  proprietary  equipment
manufactured by the Company.  Accordingly,  results of operations of the Company
for any particular quarter are not necessarily indicative of results that may be
expected for any subsequent quarter or related fiscal year.


NEW ACCOUNTING PRONOUNCEMENTS

In 1999, the Company  adopted  Statement of Financial  Accounting  Standards No.
130,  "Reporting  Comprehensive  Income"  (SFAS 130) and  Statement of Financial
Accounting  Standards No. 131,  "Disclosures about Segments of an Enterprise and
Related   Information"   (SFAS  131).   SFAS  130  requires  the  components  of
comprehensive  income to be  disclosed  in the  financial  statements.  SFAS 131
requires that the Company  report certain  information if specific  requirements
are met about  operating  segments of the Company  including  information  about
services,   geographic  areas  of  operation  and  major   customers.   Required
disclosures  have been made and prior years'  information  has been restated for
the impact of SFAS Statements 130 and 131.

Statement of Financial Accounting Standards No. 133 (SFAS 133),  "Accounting for
Derivative  Instruments  and Hedging  Activities",  establishes  accounting  and
reporting  standards for derivative  instruments and for hedging  activities and
requires  recognition  of all  derivatives on the balance sheet measured at fair
value.  SFAS 133 is effective for all fiscal  quarters  beginning after June 15,
1999.  The Company is  continuing  to  evaluate  the  provisions  of SFAS 133 to
determine its impact on financial position and results of operations.


YEAR 2000 COMPLIANCE

The  costs of the  planned  year 2000  modifications  and the dates by which the
Company expects to complete its plans are based on management's  best estimates,
which were derived utilizing  numerous  assumptions of future events,  including
the continued availability of certain resources,  third-party modification plans
and other factors.  Specific  factors that may cause  differences  between these
estimates and actual results include,  without limitation,  the availability and
cost of personnel  trained in these areas, the ability to locate and correct all
relevant  computer  codes,  changes in consulting fees and costs to remediate or
replace hardware and software, non-incremental costs resulting from redeployment
of internal resources, timely responses to and corrections by third parties such
as significant customers and suppliers, and similar uncertainties.


                                       27
<PAGE>

The Company utilizes software and related computer technologies essential to its
operations  and to  certain  products  that use two digits  rather  than four to
specify the year,  which could  result in a date  recognition  problem  with the
transition to the year 2000. The Company has  established  and is implementing a
plan, primarily utilizing internal resources,  to assess the potential impact of
the year 2000 on the Company's systems and operations and to implement solutions
to address this issue.  The Company has completed the assessment and remediation
phases of its year 2000 plan,  including a combination of repair and replacement
of affected systems. The Company is presently  developing  contingency plans for
various aspects of operations.

For substantially all of the Company's internal systems, this remediation was an
incidental  consequence of the ongoing  implementation  of a new integrated core
business  system.  The testing  phase is in process and should be  completed  by
October 1, 1999. Critical systems have been tested to be compliant.

The total incremental cost of this project,  comprised primarily of the costs of
the  implementation  of a new integrated  core business system includes costs of
approximately  $3.5  million  incurred in fiscal year 1998 and  expenditures  in
fiscal  year 1999 of  approximately  $4.0  million  which were  included  in the
Company's capital expenditures plan.

The Company's most likely worst case year 2000 scenario would be an interruption
in work or cash flow resulting from unanticipated  problems encountered with the
information  systems of the Company or of any of the  significant  third parties
with whom the  Company  does  business.  The Company  believes  that the risk of
significant  business  interruption due to  unanticipated  problems with its own
systems is low based on the  progress of the  Company's  year 2000 plan to date.
The  Company  is  developing  contingency  plans,  which are  anticipated  to be
completed by November 30, 1999,  in the event  unforeseen  internal  disruptions
occur.

The Company  believes  its highest  risk  relates to  significant  suppliers  or
customers  failing  to  remediate  their  year 2000  issues in a timely  manner.
Relating  to its  suppliers,  the Company has  identified  and will  continue to
identify alternative sources of supply of necessary materials. The risk relating
to the  Company's  customers  includes  delays in receipt  of  payment  due to a
customer's  unresolved year 2000 issues and to customer product migration due to
the Company's  unresolved  year 2000 issues.  The  Company's  year 2000 plan and
contingency  plans  will  help  to  mitigate  the  impact  of  customer  product
migration.  However,  there  can be no  assurance  that  the  Company  will  not
experience  unanticipated  costs and/or business  interruptions due to year 2000
problems in its internal systems,  its supply chain or from customer payment and
product migration issues, or that such costs and/or  interruptions will not have
a material adverse effect on the Company's  consolidated  financial condition or
results of operation.


CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained herein,  particularly the information appearing in
the Letter to  Shareholders  and in this section under the headings  "Results of
Operations",  "Liquidity and Capital Resources",  "Backlog",  "Outlook", "Market
Risk" and "Year 2000  Compliance"  includes  forward-looking  statements.  These
statements, comprising all statements herein which are not historical, are based
upon the Company's  interpretation  of what it believes are significant  factors
affecting its businesses,  including many  assumptions  regarding future events,
and are made  pursuant  to the safe  harbor  provisions  of  Section  27A of the
Securities Act of 1933, as amended,  and Section 21E of the Securities  Exchange
Act of 1934, as amended.  References  to  "opportunities",  "growth  potential",
"objectives"  and  "goals",  the  words  "anticipate",   "believe",  "estimate",
"expect",  and similar  expressions  used herein  indicate such  forward-looking
statements. Actual results could differ materially from those anticipated in any
forward-looking  statements as a result of various factors,  including  economic
downturns in industries  served,  delays or  cancellations  of customer  orders,
delays in  shipping  dates of  products,  significant  cost  overruns on certain
projects,  significant  restructuring or other special,  non-recurring  charges,
foreign currency  exchange rate  fluctuations,  delays in achieving  anticipated
cost  savings  or in  fully  implementing  project  and  information  management
systems,  availability  of financing  at  acceptable  terms and possible  future
acquisitions that may not be complementary or additive.  Additional  information
regarding   certain  important  factors  that  could  cause  actual  results  of
operations  or  outcomes  of other  events  to differ  materially  from any such
forward-looking  statement appears elsewhere herein, including under the heading
"Seasonality and Fluctuations in Quarterly Results".


                                       28
<PAGE>

STATEMENT OF MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of DT Industries,  Inc., have
been  prepared by  management,  which is  responsible  for their  integrity  and
objectivity.  The  statements  have been prepared in conformity  with  generally
accepted  accounting  principles and include amounts based on management's  best
estimates and judgements.

Management has established and maintains a system of internal  control  designed
to  provide  reasonable  assurance  that  assets  are  safeguarded  and that the
financial records reflect the authorized transactions of the Company. The system
of internal  control  includes  widely  communicated  statements of policies and
business  practices  that are designed to require all employees to maintain high
ethical  standards in the conduct of Company affairs.  The internal controls are
augmented by organizational arrangements that provide for appropriate delegation
of authority and division of responsibility.

The    consolidated     financial    statements    have    been    audited    by
PricewaterhouseCoopers  LLP, independent accountants.  As part of their audit of
the    Company's    fiscal    1999    consolidated     financial     statements,
PricewaterhouseCoopers  LLP considered the Company's  system of internal control
to the extent they deemed  necessary to determine the nature,  timing and extent
of their audit tests.

The Board of Directors pursues its  responsibility  for the Company's  financial
reporting through its Audit and Finance Committee, which is composed entirely of
outside  directors.  The Audit and Finance Committee meets periodically with the
independent accountants and management.  The independent accountants have direct
access to the Audit and Finance  Committee,  with and  without  the  presence of
management representatives, to discuss the results of their audit work and their
comments  on the  adequacy of internal  accounting  controls  and the quality of
financial reporting.

Stephen J. Gore
President and Chief Executive Officer

Bruce P. Erdel
Senior Vice President, Finance and Administration


REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of DT Industries, Inc.

In our opinion,  the  accompanying  consolidated  balance sheets and the related
consolidated statements of operations, of changes in stockholders' equity and of
cash flows present fairly, in all material  respects,  the financial position of
DT Industries, Inc. and its subsidiaries at June 27, 1999 and June 28, 1998, and
the  results  of their  operations  and their  cash  flows for each of the three
fiscal years in the period ended June 27, 1999,  in  conformity  with  generally
accepted   accounting   principles.   These   financial   statements   are   the
responsibility of the Company's management;  our responsibility is to express an
opinion on these  financial  statements  based on our audits.  We conducted  our
audits of these  statements  in  accordance  with  generally  accepted  auditing
standards which require that we plan and perform the audits to obtain reasonable
assurance   about  whether  the  financial   statements  are  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the  amounts  and  disclosures  in  the  financial  statements,   assessing  the
accounting  principles  used and significant  estimates made by management,  and
evaluating the overall  financial  statement  presentation.  We believe that our
audits provide a reasonable basis for the opinion expressed above.


PricewaterhouseCoopers LLP
St. Louis, Missouri

August 6, 1999, except for
Note 17 which is as of
September 27, 1999


                                       29
<PAGE>
Consolidated Balance Sheets
(In thousands, except share and per share data)
--------------------------------------------------------------------------------

                                                     June 27,        June 28,
                                                       1999            1998
                                                    ----------      ----------
ASSETS
   Current assets:

      Cash                                          $  10,487       $   6,915

      Accounts receivable, net                         50,691          75,634

      Costs and estimated earnings in excess of
         amounts billed ($219,645 and $187,221,
         respectively) on uncompleted contracts        64,894          66,910

      Inventories, net                                 56,876          48,755

      Prepaid expenses and other                       12,320           8,931
                                                    ----------      ----------
         Total current assets                         195,268         207,145

   Property, plant and equipment, net                  77,402          69,183

   Goodwill, net                                      180,066         177,578

   Other assets, net                                    4,051           6,096
                                                    ----------      ----------
                                                    $ 456,787       $ 460,002
                                                    ==========      ==========

LIABILITIES AND STOCKHOLDERS' EQUITY
   Current liabilities:

      Current portion of long-term debt             $     384       $      55

      Accounts payable                                 37,507          33,627

      Customer advances                                15,066          13,573

      Billings in excess of costs and
         estimated earnings ($52,828
         and $87,703 respectively) on
         uncompleted contracts                          6,837           8,218

      Accrued liabilities                              32,418          43,232
                                                    ----------      ----------
         Total current liabilities                     92,212          98,705
                                                    ----------      ----------

   Long-term debt                                     103,659          89,956

   Deferred income taxes                                8,376           7,827

   Other long-term liabilities                          3,400           3,455
                                                    ----------      ----------
                                                      115,435         101,238
                                                    ----------      ----------

   Commitments and contingencies (Note 10)

   Company-obligated, mandatorily redeemable
      convertible preferred securities of
      subsidiary DT Capital Trust holding solely
      convertible junior subordinated debentures
      of the Company                                   70,000          70,000
                                                    ----------      ----------
   Stockholders' equity:

      Preferred stock, $0.01 par value;
         1,500,000 shares authorized;
         no shares issued and outstanding

      Common stock, $0.01 par value;
         100,000,000 shares authorized;
         10,107,274 and 10,502,762 shares
         issued and outstanding,
         respectively                                     113             113

      Additional paid-in capital                      133,348         134,608

      Retained earnings                                77,984          80,561

      Cumulative translation adjustment                (1,527)           (778)

      Less -
         Treasury stock (1,268,488 and
            873,000 shares at June 27, 1999
            and June 28, 1998, respectively),
            at cost                                   (30,778)        (24,445)
                                                    ----------      ----------
         Total stockholders' equity                   179,140         190,059
                                                    ----------      ----------
                                                    $ 456,787       $ 460,002
                                                    ==========      ==========

See accompanying Notes to Consolidated Financial Statements.

                                       30
<PAGE>

Consolidated Statement of Operations
(In thousands, except share and per share data)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
Net sales                                    $ 442,084       $ 519,342       $ 396,110

Cost of sales                                  348,487         380,126         285,044
                                             ----------      ----------      ----------
Gross profit                                    93,597         139,216         111,066

Selling, general and administrative
   expenses                                     80,740          75,246          54,367

Restructuring charge (Note 14)                   2,500             ---             ---

Loss on sale of assets of Knitting Elements
   division (Note 3)                               ---           1,383             ---
                                             ----------      ----------      ----------
Operating income                                10,357          62,587          56,699

Interest expense, net                            7,742           6,509          11,088

Dividends on Company-obligated,
   mandatorily redeemable convertible
   preferred securities of subsidiary
   DT Capital Trust holding solely
   convertible junior subordinated
   debentures of the Company,
   at 7.16% per annum                            5,012           5,012             251
                                             ----------      ----------      ----------
Income (loss) before provision for
   income taxes and extraordinary loss          (2,397)         51,066          45,360

Provision (benefit) for income taxes              (634)         20,182          18,979
                                             ----------      ----------      ----------
Income (loss) before extraordinary loss         (1,763)         30,884          26,381

Extraordinary loss on debt refinancing,
   net of income tax benefits of $800
   and $216, respectively                          ---           1,200             324
                                             ----------      ----------      ----------
Net income (loss)                            $  (1,763)      $  29,684       $  26,057
                                             ==========      ==========      ==========

Basic earnings per common share:

   Income (loss) before extraordinary loss   $   (0.17)      $    2.73       $    2.55

   Extraordinary loss                              ---            0.10            0.03
                                             ----------      ----------      ----------
   Net income (loss)                         $   (0.17)      $    2.63       $    2.52
                                             ==========      ==========      ==========

Diluted earnings per common share:

   Income (loss) before extraordinary loss   $   (0.17)      $    2.49       $    2.41
   Extraordinary loss
                                                   ---            0.09            0.03
                                             ----------      ----------      ----------
   Net income (loss)                         $   (0.17)      $    2.40       $    2.38
                                             ==========      ==========      ==========

Weighted average common shares outstanding:

   Basic                                     10,149,215      11,297,409      10,349,444

   Diluted                                   10,181,800      13,621,481      11,022,080
                                             ==========      ==========      ==========
</TABLE>

See accompanying Notes to Consolidated Financial Statements.


                                       31
<PAGE>

Consolidated Statement of
Changes in Stockholders' Equity
(In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                       Accumulated
                                                        Additional                       other                            Total
                                           Common        paid-in        Retained      comprehensive      Treasury      stockholder's
                                           stock         capital        earnings         income           stock           equity
                                         ----------     ----------     ----------     -------------     ----------     -------------
<S>                                      <C>            <C>            <C>             <C>               <C>             <C>
BALANCE, JUNE 30, 1996                   $      90      $  61,255      $  26,539       $      ---        $    ---        $  87,884

Comprehensive income:

   Net income; total comprehensive
      income                                                              26,057                                            26,057

Issuance of common stock                        23         73,474                                                           73,497

Exercise of stock options                                     678                                                              678

Payments on stock subscriptions
   receivable                                                 213                                                              213

Issuance costs of Company-obligated
   mandatorily redeemable convertible
   preferred securities of subsidiary
   DT Capital Trust holding solely
   convertible junior subordinated
   debentures of the Company                               (2,250)                                                          (2,250)

Dividends declared and paid                                                 (812)                                             (812)
                                         ----------     ----------     ----------     -------------     ----------     -------------
BALANCE, JUNE 29, 1997                         113        133,370         51,784              ---             ---          185,267
                                         ----------     ----------     ----------     -------------     ----------     -------------
Comprehensive income:

   Net income                                                             29,684

   Foreign currency translation                                                              (778)

      Total comprehensive income                                                                                            28,906

Exercise of stock options                                   1,119                                                            1,119

Payments on stock subscriptions                               119                                                              119

Dividends declared and paid                                                 (907)                                             (907)

Stock repurchase                                                                                          (24,445)         (24,445)
                                         ----------     ----------     ----------     -------------     ----------     -------------
BALANCE, JUNE 28, 1998                         113        134,608         80,561             (778)        (24,445)         190,059
                                         ----------     ----------     ----------     -------------     ----------     -------------
Comprehensive income:

   Net income (loss)                                                      (1,763)

   Foreign currency translation                                                              (749)

      Total comprehensive income                                                                                            (2,512)

Dividends declared and paid                                                 (814)                                             (814)

Treasury stock activity                                    (1,260)                                          3,652            2,392

Stock repurchase                                                                                           (9,985)          (9,985)
                                         ----------     ----------     ----------     -------------     ----------     -------------
BALANCE, JUNE 27, 1999                   $     113      $ 133,348      $  77,984       $   (1,527)      $ (30,778)      $  179,140
                                         ==========     ==========     ==========     =============     ==========     =============
</TABLE>


See accompanying Notes to Consolidated Financial Statements.


                                       32
<PAGE>

Consolidated Statement of Cash Flows
(In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

   Net income (loss)                         $  (1,763)      $  29,684       $  26,057

   Adjustments to reconcile net
      income (loss) to net cash
      provided (used) by operating
      activities:

      Depreciation                              10,075           8,279           5,955

      Amortization                               5,389           5,471           5,098

      Deferred income tax provision               (707)            203           2,612

      Loss on debt refinancing                                   2,000             540

      Loss on sale of assets of Knitting
         Elements division                                       1,383

   (Increase) decrease in current assets,
      excluding the effect of acquisitions:

      Accounts receivable                       20,894           4,127         (26,482)

      Costs and earnings in excess of
         amounts billed                          2,016            (979)         (2,935)

      Inventories                               (6,115)         (3,083)         (7,212)

      Prepaid expenses and other                (1,340)          1,414           3,016

   Increase (decrease) in current
      liabilities, excluding
      the effect of acquisitions:

      Accounts payable                           7,549          (3,884)         (3,015)

      Customer advances                          1,323          (2,460)         (4,300)

      Billings in excess of costs
         and earnings on
         uncompleted contracts                  (1,345)          1,047           2,115

      Accrued liabilities                       (7,715)            981            (693)

      Other                                        (18)           (356)         (1,463)
                                             ----------      ----------      ----------
         Net cash provided (used)
         by operating activities                28,243          43,827            (707)
                                             ----------      ----------      ----------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Capital expenditures                        (15,903)        (17,314)        (11,850)

   Acquisition of Scheu & Kniss net assets     (10,352)

   Acquisition of Lucas Assembly and Test
      Systems net assets, net of cash
      acquired of $91                                          (46,721)

   Proceeds from the sale of assets of
      Knitting Elements division                                 9,375

   Acquisition of Mid-West stock and
      Hansford stock, net of cash
      acquired of $21,573                                                      (92,756)

   Other                                        (1,778)
                                             ----------      ----------      ----------
      Net cash used in investing activities    (28,033)        (54,660)       (104,606)
                                             ----------      ----------      ----------
</TABLE>
(continued)

See accompanying Notes to Consolidated Financial Statements.

                                       33
<PAGE>


Consolidated Statement of Cash Flows (Continued)
(In thousands)
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
CASH FLOWS FROM FINANCING ACTIVITIES:

   Net borrowings from revolving loans       $   7,683       $  89,986       $     918

   Proceeds from issuance of term debt           6,544                          96,708

   Payments on borrowings                         (277)        (49,220)       (129,518)

   Debt issuance costs                                            (947)         (2,510)

   Net proceeds from issuance of
      Company-obligated, mandatorily
      redeemable convertible preferred
      securities of subsidiary DT Capital
      Trust holding solely convertible
      junior subordinated debentures
      of the Company                                                            67,750

   Payments for repurchase of stock             (9,985)        (24,445)

   Net proceeds from issuance of common stock      119           1,119          74,175

   Payments on stock subscriptions receivable                      119             213

   Dividends paid on common stock                 (814)           (907)           (812)
                                             ----------      ----------      ----------
      Net cash provided by financing
         activities                              3,270          15,705         106,924
                                             ----------      ----------      ----------
Effect of exchange rate changes                     92            (778)            ---
                                             ----------      ----------      ----------
Net increase in cash                             3,572           4,094           1,611

Cash and cash equivalents at
   beginning of period                           6,915           2,821           1,210
                                             ----------      ----------      ----------
Cash and cash equivalents at end of period   $  10,487       $   6,915       $   2,821
                                             ==========      ==========      ==========


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

   Cash paid (received) during the period for:

      Interest                               $   7,161       $   6,233       $  10,630

      Income taxes                           $  (1,674)      $  11,447       $  16,497
</TABLE>


SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:

The Company  purchased  Scheu & Kniss in fiscal  1999;  Lucas  Assembly and Test
Systems, which has been renamed Assembly Technology & Test (ATT) in fiscal 1998;
and Mid-West Automation Enterprises,  Inc. (Mid-West) and Hansford Manufacturing
Corporation (Hansford) in fiscal 1997.

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
Fair value of assets acquired                $   5,843       $  56,283       $  55,185

Fair value assigned to goodwill                  5,351          14,248          68,226

Cash paid                                      (10,352)        (46,721)        (92,756)
                                             ----------      ----------      ----------
Liabilities assumed                          $     842       $  23,810       $  30,655
                                             ==========      ==========      ==========
</TABLE>

See accompanying Notes to consolidated Financial Statements.


                                       34
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands, except per share data)
--------------------------------------------------------------------------------

NOTE 1 - BUSINESS

DT Industries, Inc. (DTI or the Company) is a leading designer, manufacturer and
integrator  of automated  production  systems used to assemble,  test or package
industrial  and consumer  products.  The Company also produces  precision  metal
components,  tools  and dies  for a broad  range of  applications.  The  Company
markets its products through two primary segments: Automation and Packaging. The
Company's  operations are located in North America and Europe,  but its products
are sold throughout the world.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The  accounting  policies  utilized  by the  Company in the  preparation  of the
financial  statements conform to generally accepted accounting  principles,  and
require that management make estimates and assumptions  that affect the reported
amounts of assets and  liabilities  at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual amounts could differ from these estimates.

The significant accounting policies followed by the Company are described below.

REVENUE RECOGNITION

The  percentage  of  completion  method of  accounting is used by the Company to
recognize revenues and related costs. Under the percentage of completion method,
revenues are measured based on the ratio of engineering and manufacturing  labor
hours incurred to date compared to total estimated engineering and manufacturing
labor  hours or,  for  certain  customer  contracts,  the  ratio of total  costs
incurred to date to total estimated  costs. Any revisions in the estimated total
costs or values of the  contracts  during the  course of the work are  reflected
when the facts that require the revisions become known.

Costs and related  expenses to manufacture  the products are recorded as cost of
sales when the related revenue is recognized. Provisions for estimated losses on
uncompleted  contracts  are  made  in  the  period  in  which  such  losses  are
determined.

Cash deposits  received from customers on contracts in progress are reflected as
customer advances in the consolidated balance sheet until the related revenue is
recognized  in  accordance  with  the  procedures  described  above.  Costs  and
estimated  earnings  in excess of amounts  billed on  percentage  of  completion
contracts represent costs incurred and earnings recognized in excess of customer
advances  received.  Billings in excess of costs incurred and estimated earnings
on uncompleted contracts represent customer advances received in excess of costs
incurred and earnings recognized.

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements  include the accounts of the Company and
its wholly-owned  subsidiaries.  All significant  intercompany  transactions and
balances have been eliminated.

FOREIGN CURRENCY TRANSLATION

The accounts of the  Company's  foreign  subsidiaries  are  maintained  in their
respective local currencies.  The accompanying consolidated financial statements
have been translated and adjusted to reflect U.S. dollars on the basis presented
below.

Assets and  liabilities are translated  into U.S.  dollars at year-end  exchange
rates.  Income and expense  items are  translated  at average  rates of exchange
prevailing  during  the  year.   Adjustments   resulting  from  the  process  of
translating  the  consolidated  amounts into U.S.  dollars are  accumulated in a
separate  translation  adjustment  account,  included in  stockholders'  equity.
Common stock and additional  paid-in  capital are translated at historical  U.S.
dollar  equivalents  in  effect  at the date of  acquisition.  Foreign  currency
transaction  gains and  losses  are  included  in  earnings  currently.  Foreign
currency  transaction  gains  and  losses  were  not  material  for all  periods
presented.


                                       35
<PAGE>

CASH AND CASH EQUIVALENTS

All highly liquid debt instruments  purchased with original  maturities of three
months or less are classified as cash equivalents.

CONCENTRATIONS OF CREDIT RISK

The Company  sells a majority of its  machines to a wide range of  manufacturing
companies.  The Company performs ongoing credit evaluations of its customers and
generally does not require  collateral,  although many customers pay deposits to
the Company prior to shipment of its products.  The Company  maintains  reserves
for  potential  credit  losses and  historically  such  losses  have been within
management's  expectations.  At June 27,  1999,  the Company had no  significant
concentrations of credit risk.

INVENTORIES

Domestic  inventories  are  stated  at the lower of cost,  determined  using the
last-in,  first-out (LIFO) method, or market, with the exception of raw material
inventories and the material component of work in process inventories at certain
subsidiaries,  including foreign  subsidiaries,  totaling  approximately $25,500
which are accounted for using the first-in, first-out method (FIFO). For various
tax and statutory reasons, inventories of the Company's foreign subsidiaries are
stated  at FIFO  costs.  The  effects  on  financial  position  and  results  of
operations  from  applying  the FIFO method for such  material  inventories  and
inventories  of  foreign  subsidiaries  are  immaterial.  For other  inventories
maintained  on a LIFO basis,  cost under the LIFO method  approximates  the FIFO
method.   Inventories   include  the  cost  of   materials,   direct  labor  and
manufacturing overhead.

Obsolete or unsalable  inventories are reflected at their  estimated  realizable
values.

PROPERTY, PLANT AND EQUIPMENT

Property,  plant and equipment is recorded at cost and is depreciated  using the
straight-line  method over the estimated  useful lives of the assets which range
from 3 to 39.5 years.  Properties  held under capital leases are recorded at the
present value of the  non-cancelable  lease  payments over the term of the lease
and are  amortized  over the shorter of the lease term or the  estimated  useful
lives of the assets.

Expenditures  for  repairs,  maintenance  and  renewals are charged to income as
incurred.  Expenditures  which improve an asset or extend its  estimated  useful
life are capitalized.  When properties are retired or otherwise disposed of, the
related cost and accumulated  depreciation are removed from the accounts and any
gain or loss is included in income.

GOODWILL

The excess of the purchase  price over the fair value of net assets  acquired in
business combinations (goodwill) is capitalized and amortized on a straight-line
basis over periods ranging from 15 to 40 years. Goodwill amortization charged to
income for the years  ended June 27,  1999,  June 28, 1998 and June 29, 1997 was
approximately $5,031, $4,876 and $4,312, respectively.  Accumulated amortization
at June 27,  1999 and June 28,  1998  was  approximately  $18,275  and  $13,914,
respectively.

The carrying  value of goodwill is assessed  for  recoverability  by  management
based  on an  analysis  of  future  expected  cash  flows  from  the  underlying
operations of the Company.  Management  believes there has been no impairment at
June 27, 1999.

ENVIRONMENTAL LIABILITIES

Environmental  expenditures  that relate to current  operations  are expensed or
capitalized as appropriate.  Expenditures  that relate to an existing  condition
caused by past  operations,  and that do not  contribute  to  current  or future
revenue  generation,  are expensed.  Liabilities are recorded when environmental
assessments  and/or  remedial  efforts  are  probable,  and  the  costs  can  be
reasonably  estimated.  Generally,  the timing of these accruals  coincides with
completion of a feasibility  study or the Company's  commitment to a formal plan
of action.


                                       36
<PAGE>

FAIR VALUE OF FINANCIAL INSTRUMENTS

For purposes of financial  reporting,  the Company has determined the fair value
of financial  instruments  approximates  book value at June 27,  1999,  based on
terms currently available to the Company in financial markets.

INCOME TAXES

The Company files a  consolidated  federal  income tax return which includes its
domestic subsidiaries. The Company has adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes" (SFAS 109). Under SFAS 109, the
current or deferred tax  consequences  of a transaction are measured by applying
the  provisions  of  enacted  laws to  determine  the  amount  of taxes  payable
currently or in future years.  Deferred  income taxes are provided for temporary
differences  between the income tax bases of assets and  liabilities,  and their
carrying amounts for financial reporting purposes.

EARNINGS PER SHARE

Statement of Financial  Accounting Standards No. 128, "Earnings Per Share" (SFAS
128), which was adopted by the Company in fiscal 1998,  requires the computation
of Basic EPS and Diluted EPS. Basic EPS is based on the weighted  average number
of  outstanding  common shares during the period but does not consider  dilution
for  potentially  dilutive  securities.  Diluted  EPS  reflects  the  effects of
conversion of the Company's  Convertible Preferred Securities and elimination of
the related  dividends,  net of applicable income taxes, plus dilutive potential
common  shares  consisting  of  certain  shares  subject  to stock  options  and
contingent  purchase  price  payable  in common  stock  related  to an  acquired
business.  The  dilutive  potential  common  shares  arising  from the effect of
outstanding  stock options were  computed  using the treasury  stock method,  if
dilutive.  Earnings per share for fiscal 1997 have been  restated in  accordance
with SFAS 128. See Note 13 for additional information.

EMPLOYEE STOCK-BASED COMPENSATION

The Company  accounts for employee stock options in accordance  with  Accounting
Principles  Board No. 25,  "Accounting  for Stock Issued to Employees" (APB 25).
Under APB 25, the Company applies the intrinsic value method of accounting.  For
employee  stock  options  accounted for using the  intrinsic  value  method,  no
compensation  expense is  recognized  because the  options  are granted  with an
exercise  price  equal to the  market  value of the  stock on the date of grant.
During  fiscal  1997,  Statement  of  Financial  Accounting  Standards  No. 123,
"Accounting for Stock-Based  Compensation"  (SFAS 123), became effective for the
Company.  SFAS 123 prescribes the recognition of  compensation  expense based on
the fair  value of  options  or stock  awards  determined  on the date of grant.
However,  SFAS 123 allows  companies to continue to apply the valuation  methods
set forth in APB 25. For companies that continue to apply the valuation  methods
set forth in APB 25, SFAS 123 mandates  certain pro forma  disclosures as if the
fair value method had been utilized. See Note 8 for additional information.

COMPREHENSIVE INCOME

In 1999, the Company  adopted  Statement of Financial  Accounting  Standards No.
130,  "Reporting  Comprehensive  Income"  (SFAS  130).  SFAS  130  requires  the
components of comprehensive income to be disclosed in the financial  statements.
Required  disclosures for prior years have been restated in accordance with SFAS
130.

FISCAL YEAR

The Company uses a 52-53 week fiscal year that ends on the last Sunday in June.


                                       37
<PAGE>

NOTE 3 - ACQUISITIONS AND DISPOSITION

The  following  table  summarizes  certain  information  regarding the Company's
acquisitions during the past three years:

                                                              NET CASH
                                                              PURCHASE
     DATE                         BUSINESS                      PRICE
--------------     -------------------------------------     ----------
July 1996          Mid-West Automation Enterprises, Inc.      $ 75,179

September 1996     Hansford Manufacturing Corporation           17,577

July 1997          Lucas Assembly and Test Systems              46,721

August 1998        Scheu & Kniss                                10,352


During the past three fiscal  years,  the Company made four  acquisitions  which
have  significantly  expanded its product lines.  These  acquisitions  were each
accounted  for under the purchase  method of accounting  and financed  primarily
through bank borrowings, resulting in an increase in the Company's debt. Results
of  operations  of each  acquired  company have been  included in the  Company's
consolidated  financial  statements from the date of  acquisition.  The purchase
price of each acquisition was allocated to the assets and liabilities  acquired,
based on their  estimated fair value at the date of  acquisition.  The excess of
purchase price over the estimated fair value of net assets acquired was, in each
instance, recorded as goodwill.

In November  1998,  DTI made an  additional  payment to the sellers of Kalish as
determined  by formulae  based on the  earnings of the  acquired  business.  The
additional  purchase  price  specified  within  the Kalish  agreement,  based on
earnings from the acquisition date to June 28, 1998,  amounted to $3,000 and was
paid through a combination of stock and cash. This additional purchase price was
recorded as  goodwill.  One of the  directors  of the Company was a  controlling
shareholder of Kalish prior to its acquisition by the Company.

On May 1, 1998,  the  Company  completed  the sale of  substantially  all of the
assets of its non-core Knitting Elements division of Detroit Tool Metal Products
Co., a wholly owned subsidiary of DT Industries,  Inc., for $9,375.  The loss on
the sale was approximately  $1,383.  The loss, net of the estimated tax benefit,
was recorded in March 1998.

The following  table sets forth pro forma  information  for DTI as if all of the
previously discussed  acquisitions had taken place on June 29, 1998 and June 30,
1997, respectively.  The effect of the sale of the Knitting Elements division is
immaterial.  This  information  is  unaudited  and does not purport to represent
actual revenue, net income and earnings per share had the acquisitions  actually
occurred on June 29, 1998 and June 30, 1997, respectively.

                                               Pro Forma Information
                                             -------------------------
                                              June 27,       June 28,
Fiscal Year Ended                               1999           1998
---------------------------------------      ----------     ----------

Net sales                                    $ 443,016      $ 536,852

Income (loss) before extraordinary loss      $  (1,687)     $  31,433

Earnings (loss) per common share:

   Basic                                     $   (0.17)     $    2.78

   Diluted                                   $   (0.17)     $    2.53


                                       38
<PAGE>

NOTE 4 - FINANCING

Long-term debt consisted of the following:

                                              June 27,       June 28,
                                                1999           1998
                                             ----------     ----------
Notes payable to bank under a term
   and revolving loan agreement:

   Term loan                                 $  10,000      $  10,000

   Revolving loan                               84,483         78,420

Foreign currency denominated revolving
   credit facilities                             1,282          1,400

Other long-term debt (including
   capitalized leases)                           8,278            191
                                             ----------     ----------
                                               104,043         90,011
Less - current portion                             384             55
                                             ----------     ----------
                                             $ 103,659      $  89,956
                                             ==========     ==========

On July 21,  1997 the Company  replaced  its credit  facilities  with a $175,000
multi-currency  revolving and term credit facility. The multi-currency  facility
provides a $10,000 Canadian term loan and a $165,000  revolving credit facility,
which includes an approximate $80,000 sublimit for multi-currency  borrowings in
Pounds Sterling and Deutsche Marks. Borrowings under the multi-currency facility
bear interest at floating rates based on the agent bank's base rate or LIBOR (at
the option of DTI),  plus a  specified  percentage  based on the ratio of funded
debt to operating cash flow and the ratings of DTI's corporate debt. At June 27,
1999, interest rates on the multi-currency  facility ranged from 3.21% to 7.75%.
The  facility  requires  commitment  fees of  0.125%  to  0.25%  per  annum  (as
determined by the Company's ratio of funded debt to operating cash flow) payable
quarterly on any unused portion of the multi-currency facility. The agreement is
secured by the capital stock of each of the  significant  domestic  subsidiaries
and 65% of the capital stock of each significant  foreign  subsidiary of DTI. In
conjunction with entering into the new credit facility,  the Company  recognized
an  extraordinary  loss in July 1997 of $1,200  attributable to the write-off of
$2,000 of unamortized deferred financing fees, net of related $800 tax benefit.

The Company was not in compliance with certain  financial  covenants  within the
credit agreement as of June 27, 1999. In September 1999 the Company completed an
amendment to the credit facility which provided a permanent waiver of the events
of default as of June 27, 1999 as more fully described in Note 17.

On July 27, 1998, the Company's wholly-owned subsidiary,  Sencorp Systems, Inc.,
issued $7,000 of Massachusetts  Industrial Finance Agency Multi-Mode  Industrial
Development Revenue Bonds 1998 Series A (Bonds) to fund the planned expansion of
the Company's facility in Hyannis, Massachusetts.  The Bonds mature July 1, 2023
and bear interest at a floating rate determined weekly by Bank Boston,  the bond
remarketing  agent.  The weekly  rate is the  lowest per annum rate which  would
allow the bonds to be sold at a price equal to 100% of the outstanding principal
plus accrued  interest.  The interest rate, which is not permitted to rise above
12%,  was 3.65% as of June 27,  1999.  The  proceeds  from the Bonds are held in
trust until needed for the  expansion.  Approximately  $5,200 has been  received
from the Bonds as of June 27,  1999.  The  Company  was not in  compliance  with
certain financial covenants in one of the bond documents as of June 27, 1999. In
September  1999,  the  Company  completed  an  amendment  to the  relevant  bond
document,  providing,  among  other  things,  for the  permanent  waiver  of the
covenant  defaults as of June 27, 1999, the  establishment of revised  financial
covenants  and  other  requirements,  including  the  furnishing  of  additional
collateral.

The  Company's  Board of Directors has  authorized  purchases of up to 2 million
shares of the  Company's  common stock.  Through June 27, 1999,  the Company has
repurchased  1,401,100  shares of its common  stock at a total cost of  $34,430,
including fiscal 1999 purchases of 528,100 shares at a total cost of $9,985. The
repurchased  shares  are being  used for  employee  stock  option  programs.  In
conjunction  with the negotiation of the amended credit facility the Company has
agreed that it will make no further repurchases of common stock.


NOTE 5 - COMPANY-OBLIGATED,   MANDATORILY   REDEEMABLE   CONVERTIBLE   PREFERRED
         SECURITIES  OF SUBSIDIARY DT CAPITAL TRUST HOLDING  SOLELY  CONVERTIBLE
         JUNIOR SUBORDINATED  DEBENTURES  OF THE COMPANY (CONVERTIBLE  PREFERRED
         SECURITIES)

On June 12, 1997,  the Company  completed a private  placement to  institutional
investors of  1,400,000  7.16%  Convertible  Preferred  Securities  (liquidation
preference of $50 per Convertible  Preferred  Security).  The placement was made
through the  Company's  wholly owned  subsidiary,  DT Capital Trust  (Trust),  a


                                       39
<PAGE>

Delaware business trust. The securities represent undivided beneficial ownership
interests  in the Trust.  The sole asset of the Trust is the  $72,165  aggregate
principal  amount  of  the  7.16%  Convertible  Junior  Subordinated  Deferrable
Interest  Debentures  Due 2012 which were  acquired  with the proceeds  from the
offering as well as the sale of common securities to the Company.  The Company's
obligations under the Convertible Junior Subordinated Debentures,  the Indenture
pursuant to which they were  issued,  the Amended and  Restated  Declaration  of
Trust of the Trust and the Guarantee of DTI, taken  together,  constitute a full
and unconditional  guarantee by DTI of amounts due on the Convertible  Preferred
Securities.  The Convertible  Preferred Securities are convertible at the option
of the  holders  at any  time  into  the  common  stock  of DTI at an  effective
conversion  price of $38.75 per share and are  redeemable  at DTI's option after
June 1,  2000 and  mandatorily  redeemable  in  2012.  The net  proceeds  of the
offering of  approximately  $67,750 were used by DTI to retire  indebtedness.  A
registration  statement  relating  to  resales  of  such  Convertible  Preferred
Securities was declared  effective by the Securities and Exchange  Commission on
September 2, 1997. In conjunction with the amendment of the credit facility, the
Company  has  elected  to defer  interest  payments  on the  Convertible  Junior
Subordinated Debentures. As a result, quarterly distributions on the Convertible
Preferred Securities will also be deferred.


NOTE 6 - INCOME TAXES

Income (loss) before  provision  for income taxes and  extraordinary  losses was
taxed under the following jurisdictions:

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
Domestic                                     $  (9,449)      $  45,895       $  42,630

Foreign                                          7,052           5,171           2,730
                                             ----------      ----------      ----------
                                             $  (2,397)      $  51,066       $  45,360
                                             ==========      ==========      ==========
</TABLE>

The provision (benefit) for income taxes charged to operations was as follows:

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
Current

   U. S. Federal                             $  (3,393)      $  12,416       $  12,564

   State                                           112             673           2,789

   Foreign                                       2,294           1,835           1,014
                                             ----------      ----------      ----------
      Total current                               (987)         14,924          16,367
                                             ----------      ----------      ----------

Deferred

   U. S. Federal                                   (12)          4,809           2,111

   State                                           227             333             397

   Foreign                                         138             116             104
                                             ----------      ----------      ----------
      Total deferred                               353           5,258           2,612
                                             ----------      ----------      ----------
Total Provision (Benefit)                    $    (634)      $  20,182       $  18,979
                                             ==========      ==========      ==========
</TABLE>


The provision for income taxes for the fiscal years ended June 28, 1998 and June
29, 1997 is net of income tax benefits of $800 and $216,  respectively,  related
to the extraordinary losses as described in Note 4.


                                       40
<PAGE>

Deferred tax liabilities (assets) are comprised of the following:

                                              June 27,       June 28,
                                                1999           1998
                                             ----------     ----------
DEFERRED TAX LIABILITIES

   Depreciation                              $   5,856      $   5,592

   Inventory costing capitalization, net           964            833

   Earnings recognized under percentage
      of completion                              1,468          2,432

   Goodwill and intangibles amortization         3,852          2,797

   Other                                         1,547            484
                                             ----------     ----------
Total deferred tax liabilities                  13,687         12,138
                                             ----------     ----------

DEFERRED TAX ASSETS

   Postretirement benefit accrual                 (618)          (634)

   Project and inventory reserves               (3,616)        (3,900)

   Product liability reserves                     (488)          (488)

   Bad debt reserves                              (904)          (862)

   Other accruals                               (4,678)        (3,000)

   Other                                          (732)          (636)
                                             ----------     ----------
Total deferred tax assets                      (11,036)        (9,520)
                                             ----------     ----------

Deferred tax assets valuation allowance            998            998
                                             ----------     ----------
Total net deferred tax liability                 3,649          3,616

Current portion included in prepaid
   expenses and other                            4,727          4,211
                                             ----------     ----------
Long-term deferred tax liability             $   8,376      $   7,827
                                             ----------     ----------

The deferred tax assets  valuation  allowance  has been  recorded to reflect the
potential non-realization of certain deductible temporary differences.

The  effective  tax rates differ from the U.S.  Federal  income tax rate for the
following reasons:

<TABLE>
<CAPTION>
                                                          Fiscal Year Ended
                                             ------------------------------------------
                                              June 27,        June 28,        June 29,
                                                1999            1998            1997
                                             ----------      ----------      ----------
<S>                                          <C>             <C>             <C>
Tax (benefit) at the U.S. statutory rate     $    (827)      $  17,873       $  15,876
Non-deductible goodwill amortization             1,144           1,156             998
State taxes                                        220             654           2,041
Foreign sales corporation                         (354)           (834)           (320)
Other                                             (817)          1,333             384
                                             ----------      ----------      ----------
Provision (benefit) for income taxes         $    (634)      $  20,182       $  18,979
                                             ==========      ==========      ==========
</TABLE>


NOTE 7 - RETIREMENT PLANS

The Company offers  substantially all of its employees a retirement savings plan
under Section  401(k) of the Internal  Revenue Code.  Each employee may elect to
enter a written salary deferral  agreement under which a maximum of 15% of their
salary,  subject to aggregate  limits required under the Internal  Revenue Code,
may be  contributed  to the plan.  The Company  will match a  percentage  of the
employee's contribution up to a specified maximum percentage of their salary. In
addition, the Company generally is required to make a mandatory contribution and
may make a  discretionary  contribution  from  profits.  During the fiscal years
ended  June 27,  1999,  June  28,  1998 and June  29,  1997,  the  Company  made
contributions of approximately $3,241, $3,023 and $2,377, respectively.

During fiscal 1999, the Company  created a non-qualified  deferred  compensation
plan for certain executive employees. Each employee may elect to enter a written
salary deferral agreement under which a maximum of 15% of their salary, less any
amounts  contributed  under the 401(k) plan, may be contributed to the plan. The
Company will match a percentage of the employee's contribution up to a specified
maximum  percentage  of their  salary.  In  addition,  the Company  generally is
required to make a mandatory retirement contribution.


                                       41
<PAGE>

During fiscal 1999, the Company  created a non-qualified  deferred  compensation
plan for its non-employee  directors.  Pursuant to this plan, each such director
is required to defer,  until termination of service as a director,  receipt of a
specified amount of his annual retainer fee by making a hypothetical  investment
in DTI common stock equivalent units and may defer, until termination of service
as a  director,  receipt of all or a portion of his  remaining  compensation  by
making  hypothetical   investments  in  a  variety  of  investment  alternatives
including DTI common stock equivalent units.

In connection with the  acquisition of ATT in fiscal 1998, the Company  recorded
an aggregate  net  liability of $417  representing  the excess of the  estimated
projected  benefit  obligation (PBO) over the fair value of plan assets relative
to the defined benefit plans for its international  division. The following sets
forth reconciliations of the PBO and fair value of plan assets:

<TABLE>
<CAPTION>
                                    Reconciliation of Projected     Reconciliation of Projected
                                      Benefit Obligation for        Benefit Obligation from the
                                          the Year Ended              Date of Acquisition to
                                          June 27, 1999                   June 28, 1998
                                    ---------------------------     ---------------------------
<S>                                         <C>                             <C>
Beginning balance                           $  17,684                       $  13,874

   Service cost                                   981                             863
   Interest cost                                1,081                           1,030
   Actuarial loss                               3,741                           1,664
   Other                                          154                             253
   Foreign currency translation                  (938)                            ---
                                    ---------------------------     ---------------------------
Ending balance                              $  22,703                       $  17,684
                                    ===========================     ===========================
</TABLE>

<TABLE>
<CAPTION>
                                    Reconciliation of the Fair      Reconciliation of the Fair
                                     Value of Plan Assets for       Value of Plan Assets from
                                          the Year Ended            the Date of Acquisition to
                                          June 27, 1999                   June 28, 1998
                                    ---------------------------     ---------------------------
<S>                                         <C>                             <C>
Beginning balance                           $  17,166                       $  13,457

   Return on plan assets                        3,066                           2,740
   Employer contribution                          770                             716
   Other                                          154                             253
   Foreign currency translation                   920                             ---
                                    ---------------------------     ---------------------------
Ending balance                              $  22,076                       $  17,166
                                    ===========================     ===========================
</TABLE>

The following sets forth the funded status of the defined benefit plans:

<TABLE>
<CAPTION>
                                              June 27,                        June 28,
                                                1999                            1998
                                    ---------------------------     ---------------------------
<S>                                         <C>                             <C>
Projected benefit obligation                $  22,703                       $  17,684

Fair value of plan assets                      22,076                          17,166
                                    ---------------------------     ---------------------------
Excess of projected benefit
   obligation over plan assets                    627                             518

Unrecognized net loss                             116                              49
                                    ---------------------------     ---------------------------
Net pension liability                       $     511                       $     469
                                    ===========================     ===========================
</TABLE>

The following sets forth the defined benefit pension plans' net periodic pension
cost:

<TABLE>
<CAPTION>
                                         For the Year Ended         For the Period from the Date of
                                           June 27, 1999                     June 28, 1998
                                    ---------------------------     -------------------------------
<S>                                         <C>                               <C>
Service cost                                $     981                         $     863
Interest cost                                   1,081                             1,030
Expected return on plan assets                 (1,906)                           (1,841)
                                    ---------------------------     -------------------------------
Net periodic pension cost                   $     156                          $     52
                                    ===========================     ===============================
</TABLE>


                                       42
<PAGE>

The weighted-average assumptions used to determine the PBO are as follows:

<TABLE>
<CAPTION>
                                         For the Year Ended         For the Period from the Date of
                                           June 27, 1999             Acquisition to June 28, 1998
                                    ---------------------------     -------------------------------
<S>                                            <C>                               <C>
Discount rate                                  6.0%                              6.5%

Expected return on plan assets                 8.5%                              8.5%

Rate of compensation increase                  4.0%                              4.0%
</TABLE>


NOTE 8 - STOCK OPTION PLANS

The Company has three stock option plans:  the 1994  Employee  Stock Option Plan
(Employee Plan), the 1994 Directors  Non-Qualified  Stock Option Plan (Directors
Plan) and the 1996 Long-Term Incentive Plan (LTIP Plan).

The  Employee  Plan  provides  for the  granting  of  options  to the  Company's
executive  officers  and key  employees  to purchase  shares of common  stock at
prices equal to the fair market value of the stock on the date of grant. Options
to  purchase  up to  900,000  shares of common  stock may be  granted  under the
Employee  Plan.  Options  outstanding  at June 27,  1999  entitle the holders to
purchase  common  stock at prices  ranging  between  $10.25 and $34.50.  Options
outstanding become exercisable over five years from the date of grant. The right
to exercise  the options  expires ten years from the date of grant or earlier if
an option holder ceases to be employed by the Company.

The  Directors  Plan  provides  for the  granting  of options  to the  Company's
directors,  who are not employees of the Company,  to purchase  shares of common
stock  at  prices  equal to the fair  market  value of the  stock on the date of
grant.  Options to purchase up to 100,000  shares of common stock may be granted
under the  Directors  Plan.  Options  outstanding  at June 27, 1999  entitle the
holders to purchase  common stock at prices  ranging  between $13.50 and $31.625
per share.  Options outstanding become exercisable with respect to one-fourth of
the shares covered, thereby on each anniversary of the date of grant, commencing
on the second  anniversary of such date. All options granted under the Directors
Plan expire ten years from the date of grant or earlier if a director leaves the
board of directors of the Company.

The LTIP  Plan  provides  for the  granting  of four  types of awards on a stand
alone, combination, or a tandem basis, specifically, nonqualified stock options,
incentive stock options,  restricted  shares and performance  stock awards.  The
LTIP Plan  provides  for the granting of up to 600,000  shares of common  stock,
provided  that the total  number of shares  with  respect  to which  awards  are
granted  in any one  year  may  not  exceed  100,000  shares  to any  individual
employee,  and the total  number  of  shares  with  respect  to which  grants of
restricted  stock and  performance  stock  awards are made in any year shall not
exceed 50,000 shares to any individual employee.  Grants to date consist only of
non-qualified  stock options  entitling the holders to purchase  common stock at
prices  ranging  between  $15.875  and  $37.50.   The  exercise  price  of  such
non-qualified  stock  options is equal to the fair market  value of the stock on
the date of the grant.  Options  outstanding  become exercisable over five years
from the date of grant. The right to exercise the options expires ten years from
the date of grant or earlier if an option  holder  ceases to be  employed by the
Company.

A summary of the status of the Company's stock option plans as of June 27, 1999,
June 28, 1998 and June 29,  1997,  and  changes  during the years then ended are
presented below:

<TABLE>
<CAPTION>
                                              Fiscal 1999                   Fiscal 1998                   Fiscal 1997
                                       -------------------------     -------------------------     -------------------------
                                                       Weighted                      Weighted                      Weighted
                                                        Average                       Average                       Average
                                                       Exercise                      Exercise                      Exercise
                                         Shares         Price          Shares         Price          Shares         Price
                                       ----------     ----------     ----------     ----------     ----------     ----------
<S>                                    <C>              <C>            <C>            <C>            <C>            <C>
Outstanding at beginning of year       1,013,963        $20.47         939,650        $17.58         662,250        $13.86

Granted                                  252,250        $15.93         236,500        $29.72         376,950        $23.34

Exercised                                 (8,875)       $13.34         (74,887)       $14.95         (49,625)       $13.66

Forfeited                               (245,400)       $27.75         (87,300)       $19.15         (49,925)       $15.62
                                       ----------                    ----------                    ----------
Outstanding at end of year             1,011,938        $17.43       1,013,963        $20.47         939,650        $17.58
                                       ==========                    ==========                    ==========
Exercisable at end of year               404,548                       206,338                       122,625
                                       ==========                    ==========                    ==========
</TABLE>


                                       43
<PAGE>

The  following  table  summarizes  certain  information  for  options  currently
outstanding and exercisable at June 27, 1999:

<TABLE>
<CAPTION>
                          Options Outstanding                     Options Exercisable
             ---------------------------------------------     ------------------------
                             Weighted Average     Weighted                     Weighted
Range of                        Remaining         Average                      Average
Exercise        Number         Contractual        Exercise       Number        Exercise
 Prices      Outstanding           Life            Price       Exercisable      Price
--------     -----------     ----------------     --------     -----------     --------
<S>           <C>                    <C>           <C>           <C>            <C>
 $10-14         349,163              5             $13.30        271,887        $13.29

 $15-19         523,275              8             $16.65        106,661        $16.85

 $20-30          41,500              8             $27.69          7,900        $26.47

 $31-38          98,000              7             $31.93         18,100        $32.11
             -----------                                       -----------
              1,011,938                                          404,548
             ===========                                       ===========
</TABLE>


PRO FORMA DISCLOSURES

The Company  applies APB 25 and related  interpretations  in accounting  for its
stock option plans.  Accordingly,  no compensation  cost has been recognized for
the stock options  because the options were granted with an exercise price equal
to the  stock  price  on the  date of  grant.  Had  compensation  costs  for the
Company's  stock  option  plans been  determined  based on the fair value of the
options on the grant dates  consistent with the  methodology  prescribed by SFAS
123, the  Company's net income and earnings per share would have been reduced to
the pro forma amounts  indicated  below.  Due to the adoption of the methodology
prescribed  by SFAS 123,  the pro forma  results  shown  below only  reflect the
impact of stock option awards  granted in fiscal 1999 and 1998.  Because  future
stock  option  awards may be granted,  the pro forma  impact for fiscal 1999 and
1998 is not necessarily indicative of the impact in future years.

                                                 Fiscal         Fiscal
                                                  1999           1998
                                               ----------     ----------

Net income (loss)           As reported        $  (1,763)     $  29,684

                            Pro forma          $  (3,395)     $  28,220

Diluted earnings (loss)
   per common share         As reported        $   (0.17)     $    2.40

                            Pro forma          $   (0.33)     $    2.30

The fair  value of the  options  granted  (which is  amortized  over the  option
vesting period in determining the pro forma impact), is estimated on the date of
grant using the Black-Scholes  multiple  option-pricing model with the following
weighted average assumptions:

                                       Fiscal             Fiscal
                                        1999               1998
                                   --------------     --------------

Expected life of options              5 years            5 years

Risk-free interest rates            4.54 - 5.27%       5.49 - 6.11%

Expected volatility of stock            44%                39%

Expected dividend yield                 0.4%               0.3%

The weighted  average fair value of options  granted during the years ended June
27, 1999 and June 28, 1998 was $6.93 and $12.74 per share, respectively.


NOTE 9 - RELATED PARTIES

In prior years,  the Company issued 443,250 shares of the Company's common stock
at prices which  approximated  estimated  fair value ranging from $1.26 to $2.57
per share to members of management  under  agreements  which allow management to
pay for the stock with cash and/or recourse notes receivable to the Company. The
recourse notes  receivable were issued with interest rates ranging from 5.84% to
6.28% and become due  between  September  2003 and January  2004.  The notes are
reflected  as a reduction  to  additional  paid-in  capital in the  accompanying
consolidated financial statements.


                                       44
<PAGE>

NOTE 10 - COMMITMENTS AND CONTINGENCIES

The Company leases land,  buildings,  machinery,  equipment and furniture  under
various  noncancelable  operating  lease  agreements.  At June 27, 1999,  future
minimum lease payments under noncancelable operating leases were as follows:

          Fiscal year:
       --------------------     -------------
              2000                $   6,253
              2001                    5,113
              2002                    4,803
              2003                    4,341
              2004                    2,088
       2005 and thereafter           11,399
                                -------------
                                  $  33,997
                                =============

Total lease  expense  under  noncancelable  operating  leases was  approximately
$5,881,  $7,372 and $5,652 for the years ended June 27, 1999,  June 28, 1998 and
June  29,  1997,   respectively.   Commitments  under  capital  leases  are  not
significant to the consolidated financial statements.

The  Company is a party to various  claims  and  lawsuits  arising in the normal
course of business.  It is the opinion of management,  after  consultation  with
legal counsel,  that those claims and lawsuits,  when resolved,  will not have a
material  adverse  effect on the  financial  position,  cash flows or results of
operations of the Company.


NOTE 11 - DEPENDENCE ON SIGNIFICANT CUSTOMERS

No customers accounted for 10% or more of their respective total segment's sales
in fiscal 1999.  Total net sales to a customer in the  electronics industry were
$85,241  in  fiscal  1998.  Total  net sales to a  customer  in the  electronics
industry  were  $89,062  and  total net sales to a  customer  in the  automotive
industry were $43,179 in fiscal 1997. Trade receivables recorded for significant
customers at June 28, 1998 were $11,051.


                                       45
<PAGE>

NOTE 12 - SUPPLEMENTAL BALANCE SHEET INFORMATION
                                              June 27,       June 28,
                                                1999           1998
                                             ----------     ----------
Accounts receivable

   Trade receivables                         $  53,715      $  77,776
   Less - allowance for doubtful accounts        3,024          2,142
                                             ----------     ----------
                                             $  50,691      $  75,634
                                             ==========     ==========

Inventories, net

   Raw materials                             $  21,835      $  18,285
   Work in process                              25,418         22,749
   Finished goods                                9,623          7,721
                                             ----------     ----------
                                             $  56,876      $  48,755
                                             ==========     ==========

Property, plant and equipment

   Machinery and equipment                   $  70,811      $  57,148
   Buildings and improvements                   30,080         26,391
   Land and improvements                         6,924          5,664
   Construction-in-progress                      2,950          3,659
                                             ----------     ----------
                                               110,765         92,862
   Less - accumulated depreciation              33,363         23,679
                                             ----------     ----------
                                             $  77,402      $  69,183
                                             ==========     ==========

Accrued liabilities

   Accrued employee compensation
      and benefits                           $  12,291      $  13,645
   Other                                        20,127         29,587
                                             ----------     ----------
                                             $  32,418      $  43,232
                                             ==========     ==========

During fiscal 1999 and 1998,  the Company  repurchased  1,401,100  shares of its
common  stock.  The shares  remaining  in treasury  have been  reflected  in the
stockholders'  equity section of the  consolidated  balance sheet as of June 27,
1999  and  June 28,  1998 at cost of  $30,778  and  $24,445,  respectively.  The
repurchased  shares  are being  used for  employee  stock  option  programs.  In
conjunction  with the  negotiations of the amended credit facility  discussed in
Note 17, the  Company  has agreed  that it will make no further  repurchases  of
common stock.


NOTE 13 - EARMOMGS PER SHARE OF COMMON STOCK

The following table represents  reconciliations  of income before  extraordinary
loss and weighted average shares outstanding  between basic and diluted earnings
per share for the years ended June 27,  1999,  June 28, 1998 and June 29,  1997.
The convertible  preferred  securities were antidilutive for the year ended June
27, 1999 and have been excluded  from the  computation  of diluted  earnings per
share (share data in thousands).

<TABLE>
<CAPTION>
                                                                        For the Year Ended
                                   --------------------------------------------------------------------------------------------
                                          June 27, 1999                   June 28, 1998                   June 29, 1997
                                   ----------------------------    ----------------------------    ----------------------------
                                   Income before                   Income before                   Income before
                                   extraordinary                   extraordinary                   extraordinary
                                       loss            Shares          loss            Shares          loss            Shares
                                   -------------     ----------    -------------     ----------    -------------     ----------
<S>                                  <C>               <C>           <C>               <C>           <C>               <C>
Basic                                $  (1,763)        10,149        $  30,884         11,297        $  26,381         10,349

Effect of dilutive securities:

   Mandatorily redeemable
      convertible preferred
      securities                                                         3,008          1,806              151             80

   Stock options                                           33                             394                             472

   Contingent issuable shares                                                             124                             121
                                   -------------     ----------    -------------     ----------    -------------     ----------
Diluted                              $  (1,763)        10,182        $  33,892         13,621        $  26,532         11,022
                                   =============     ==========    =============     ==========    =============     ==========
</TABLE>


                                       46
<PAGE>

NOTE 14 - SPECIAL CHARGES

During the fourth  quarter  of fiscal  1999,  the  Company  recorded  $13,000 of
special  charges.  The special charges were comprised of a $9,800 charge to cost
of good sold reflecting  additional costs and provisions for estimated losses on
three large automation systems projects, a $2,500 restructuring charge described
below and a $700 provision for a receivable  currently  being pursued in a legal
action.

The  restructuring  charge of $2,500  comprised  severance costs associated with
management changes and workforce reductions,  idle facility costs resulting from
the lower level of order  activity  and  non-cash  asset  writedowns.  The costs
include the shut down of one packaging  manufacturing facility in July 1999. The
breakdown of the  restructuring  reserve  recorded in the fourth  quarter was as
follows:

          Severance costs                    $   1,749
          Idle facilities costs                    390
          Asset writedowns and other               361
                                            -----------
                                             $   2,500
                                            -----------

The balance of the restructuring  reserve as of June 27, 1999 was $2,118,  which
is expected to be fully utilized in the next fiscal year.


NOTE 15 - QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized  quarterly  financial  data for fiscal  1999,  1998 and 1997  appears
below.

<TABLE>
<CAPTION>
                               Net sales                                 Gross profit
                  ----------------------------------          ----------------------------------
                    1999         1998         1997              1999         1998         1997
                  --------     --------     --------          --------     --------     --------
<S>               <C>          <C>          <C>               <C>          <C>          <C>
First quarter     $112,907     $115,764     $ 82,635          $ 28,225     $ 30,908     $ 22,765
Second quarter      111,627     132,431      100,693            25,575       35,977       27,670
Third quarter       104,097     132,561      103,359            24,493       36,507       29,707
Fourth quarter      113,453     138,586      109,423            15,304       35,824       30,924
                  --------     --------     --------          --------     --------     --------
                  $ 442,084    $519,342     $396,110          $ 93,597     $139,216     $111,066
                  ========     ========     ========          ========     ========     ========
</TABLE>

<TABLE>
<CAPTION>
                                                                       Diluted earnings
                          Net income (loss)                            (loss) per share
                  ----------------------------------          ----------------------------------
                    1999         1998         1997              1999         1998         1997
                  --------     --------     --------          --------     --------     --------
<S>               <C>          <C>          <C>                <C>          <C>          <C>
First quarter     $ 3,785      $  5,335     $  4,549           $ 0.37       $ 0.44       $ 0.48
Second quarter      1,092         8,228        6,038             0.11         0.66         0.58
Third quarter         492         7,714        7,216             0.05         0.62         0.61
Fourth quarter     (7,132)        8,407        8,254            (0.70)        0.68         0.69
                  --------     --------     --------
                  $(1,763)     $ 29,684     $ 26,057
                  ========     ========     ========
</TABLE>

The net income and diluted  earnings  per share for the first  quarter of fiscal
1998 and 1997 include the effect of the extraordinary  losses on the refinancing
of debt as described in Note 4. Also, net income and diluted  earnings per share
for the third  quarter of fiscal 1998  include the loss on the sale of assets of
the Knitting Elements division ($844 after tax or $0.06 per diluted share).


NOTE 16 - BUSINESS SEGMENTS

The Company adopted  Statement of Financial  Accounting  Standards No. 131 (SFAS
131),  "Disclosures  about Segments of an Enterprise  and Related  Information",
effective June 27, 1999. SFAS 131 requires  disclosure of segment information on
the basis that it is used  internally for  evaluating  segment  performance  and
deciding how to allocate resources to segments. Accordingly, segment information
for fiscal 1998 and 1997 has been restated to conform with the  requirements  of
SFAS 131.

The Company has two primary reportable segments:  Automation and Packaging.  The
operations  of the  Company's  Automation  segment  design and build  integrated
systems for the assembly,  test and handling of discrete products. The Packaging
segment manufactures tablet processing,  counting and liquid filling systems and
plastics   processing   equipment.   The  Company's   reportable   segments  are
distinguished based on the nature of products manufactured and sold and types of
customers.  The Company's other businesses produce custom and  precision-stamped
steel and aluminum components through its stamping and fabrication operations.

The Company evaluates performance and allocates resources to reportable segments
primarily based on operating income.  The accounting  policies of the reportable
segments are the same as those described in the summary of significant policies.
Intersegment sales are not significant.


                                       47
<PAGE>

Financial  information for the Company's  reportable  segments  consisted of the
following:

<TABLE>
<CAPTION>
                                                          1999          1998           1997
                                                       ----------    ----------     ----------
<S>                                                    <C>           <C>            <C>
NET SALES

   Automation                                          $ 299,787     $ 355,052      $ 248,213
   Packaging                                             109,487       116,803        100,435
   Other                                                  32,810        47,487         47,462
                                                       ----------    ----------     ----------
      Consolidated Total                               $ 442,084     $ 519,342      $ 396,110
                                                       ==========    ==========     ==========

OPERATING INCOME

   Automation                                          $   5,573     $  47,436      $  39,629
   Packaging                                              12,439        20,801         17,158
   Other                                                   1,765         3,391          6,966
   Corporate                                              (9,420)       (9,041)        (7,054)
                                                       ----------    ----------     ----------
      Consolidated Total                               $  10,357     $  62,587      $  56,699
                                                       ==========    ==========     ==========

ASSETS

   Automation                                          $ 272,816     $ 299,423      $ 240,396
   Packaging                                             155,573       128,616        116,941
   Other                                                  21,325        25,170         34,812
   Corporate                                               7,073         6,793          3,047
                                                       ----------    ----------     ----------
      Consolidated Total                               $ 456,787     $ 460,002      $ 395,196
                                                       ==========    ==========     ==========

CAPITAL EXPENDITURES

   Automation                                          $   3,889     $   9,441      $   6,654
   Packaging                                               9,327         3,313            770
   Other                                                   1,624         3,459          3,806
   Corporate                                               1,063         1,101            620
                                                       ----------    ----------     ----------
      Consolidated Total                               $  15,903     $  17,314      $  11,850
                                                       ==========    ==========     ==========

DEPRECIATION AND AMORTIZATION

   Automation                                          $   9,426     $   8,714      $   6,327
   Packaging                                               3,595         2,793          2,564
   Other                                                   1,496         1,491          1,258
   Corporate                                                 947           752            904
                                                       ----------    ----------     ----------
      Consolidated Total                               $  15,464     $  13,750      $  11,053
                                                       ==========    ==========     ==========
</TABLE>

The  reconciliation  of segment  operating income to consolidated  income (loss)
before income taxes consisted of the following:

<TABLE>
<CAPTION>
                                                          1999          1998           1997
                                                       ----------    ----------     ----------
<S>                                                    <C>           <C>            <C>
Automation                                             $   5,573     $  47,436      $  39,629

Packaging                                                 12,439        20,801         17,158
                                                       ----------    ----------     ----------
   Operating income for reportable segments               18,012        68,237         56,787

Operating income for immaterial businesses                 1,765         3,391          6,966

Corporate                                                 (9,420)       (9,041)        (7,054)

Interest expense, net                                     (7,742)       (6,509)       (11,088)

Dividends on Company-obligated,
   mandatorily redeemable convertible
   preferred securities of subsidiary
   DT Capital Trust holding solely
   convertible junior subordinated
   debentures of the Company                              (5,012)       (5,012)          (251)
                                                       ----------    ----------     ----------
Consolidated income (loss) before income taxes         $  (2,397)    $  51,066      $  45,360
                                                       ==========    ==========     ==========
</TABLE>


                                       48
<PAGE>

Financial  information  related to the Company's  operations by geographic  area
consisted of the following:

<TABLE>
<CAPTION>
                                                          1999          1998           1997
                                                       ----------    ----------     ----------
<S>                                                    <C>           <C>            <C>
NET SALES

   United States                                       $ 333,602     $ 357,146      $ 275,863

   International                                         108,482       162,196        120,247
                                                       ----------    ----------     ----------
      Consolidated Total                               $ 442,084     $ 519,342      $ 396,110
                                                       ==========    ==========     ==========

LONG-LIVED ASSETS

   United States                                       $  67,784     $  59,027      $  49,487

   International                                           9,618        10,156          1,645
                                                       ----------    ----------     ----------
      Consolidated Total                               $  77,402     $  69,183      $  51,132
                                                       ==========    ==========     ==========
</TABLE>

Net sales are  attributed  to  countries  based on the shipping  destination  of
products sold. Long-lived assets consist of total property, plant and equipment.


NOTE 17 - SUBSEQUENT EVENTS

In July 1999, the Company  completed the acquisition of certain net assets of C.
E. King,  Ltd. a  manufacturer  of tablet  counting,  liquid filling and capping
equipment  located  in  Chertsey,  England.  The  purchase  price of $2,100  was
primarily financed by borrowings under the Company's  revolving credit facility.
As the  transaction  occurred  subsequent to the end of fiscal 1999, the balance
sheet and results of  operations of C. E. King are excluded from the fiscal 1999
consolidated  balance  sheet and  results of  operations  of DTI.  The pro forma
effects of the C. E. King  acquisition  on the Company's  fiscal 1999  financial
position are not material.

In September  1999,  the Company  completed an amendment to its $175,000  credit
facility. The total line of credit as amended is $135,000,  including a $125,000
revolving credit facility and a $10,000 term credit facility.  The facility will
be  increased  to $140,000  if the Company  meets  certain  operating  cash flow
targets  during  the first  six  months of  fiscal  2000.  Borrowings  under the
amendment to the credit  facility will bear interest at floating  rates based on
the prime rate plus 1 7/8% or LIBOR  plus 3% (at the option of DTI).  The credit
facility,  as amended, will mature on April 2, 2001. Borrowings under the credit
facility  will be  secured  by  substantially  all of the  assets of DTI and its
domestic subsidiaries. The amendment to the credit facility provides a permanent
waiver of the events of default as of June 27,  1999 and  establishes  a revised
set of financial and other covenants and restrictions.

In conjunction with the negotiation of the amendment to the credit facility, the
Company in September 1999 elected to defer interest  payments on the Convertible
Junior  Subordinated  Debentures  described  in Note 5. As a  result,  quarterly
distributions on the Convertible  Preferred Securities will also be deferred and
DTI will not declare or pay dividends on its common stock.


                                       49
<PAGE>

NOTICE OF ANNUAL MEETING

The  annual  meeting  of  stockholders  of DT  Industries,  Inc.  will  be  held
Wednesday,  November 10, 1999, at 10:00 a.m., at the Sheraton Hotel,  2431 North
Glenstone Avenue, Springfield, Missouri 65803, (417) 831-3131.


INDEPENDENT ACCOUNTANTS

PricewaterhouseCoopers LLP, St. Louis, Missouri


LEGAL COUNSEL

Dickstein Shapiro Morin & Oshinsky LLP, Washington, D.C.
Blackwell Sanders Peper Martin, Kansas City, Missouri


INVESTOR RELATIONS

The Financial Relations Board, Inc., Chicago, Illinois


TRANSFER AND DIVIDEND DISBURSING AGENT

ChaseMellon Shareholders Services,  L.L.C., 85 Challenger Road, Overpeck Centre,
Ridgefield Park, New Jersey 07660, (888) 213-0965


FORM 10-K

A copy of the annual  report on Form 10-K for the year ended June 27,  1999,  as
filed with the  Securities  and  Exchange  Commission,  may be  obtained  by any
stockholder  of the  company at no charge upon  request in writing to:  Bruce P.
Erdel, DT Industries,  Inc.,  Corporate  Centre,  Suite 2-300, 1949 E. Sunshine,
Springfield, Missouri 65804.


                                       50
<PAGE>

                      REPORT OF INDEPENDENT ACCOUNTANTS ON
                          FINANCIAL STATEMENT SCHEDULE


To the Board of Directors and Stockholders of
DT Industries, Inc.


     Our audits of the consolidated financial statements of DT Industries,  Inc.
and its subsidiaries,  referred to in our report dated August 6, 1999, except as
to Note 17 which is as of September 27, 1999,  appearing in this Form 10-K, also
included an audit of the Financial  Statement  Schedule of DT  Industries,  Inc.
listed at item 14 of this Form 10-K.  In our opinion,  the  Financial  Statement
Schedule  presents fairly, in all material  respects,  the information set forth
therein  when  read in  conjunction  with  the  related  consolidated  financial
statements.


/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

St. Louis, Missouri
August 6, 1999




                                      S-1
<PAGE>

                               DT INDUSTRIES, INC.

                                  SCHEDULE VIII
            Rule 12-09 Valuation and Qualifying Accounts and Reserves
                                 (In thousands)

<TABLE>
<CAPTION>
           Column A                 Column B         Column C         Column D         Column E        Column F        Column G

                                   Balance at       Charged to       Charged to                        Purchase       Balance at
         Valuation and             Beginning        Costs and          Other                            of Net          End of
       Reserve Accounts            of Period         Expenses         Accounts        Deductions        Assets          Period
<S>                                <C>              <C>               <C>             <C>              <C>            <C>

                     FOR THE FISCAL YEAR ENDED JUNE 27, 1999

Deferred Tax Assets Valuation
   Allowance                        $   998                                                                            $   998

Accounts Receivable Reserve         $ 2,142          $ 1,321                          ($   439)                        $ 3,024



                     FOR THE FISCAL YEAR ENDED JUNE 28, 1998

Deferred Tax Assets Valuation
   Allowance                        $ 1,029                                           ($    31)                        $   998

Accounts Receivable Reserve         $ 1,849          $   624                          ($   461)         $   130(1)     $ 2,142

(1)  Reflects increase to Accounts Receivable Reserves due to acquisition of ATT
     and decrease due to Knitting Elements sale.



                     FOR THE FISCAL YEAR ENDED JUNE 29, 1997

Deferred Tax Assets Valuation
   Allowance                        $ 1,029                                                                            $ 1,029

Accounts Receivable Reserve         $ 1,294          $   356                          ($   373)         $   572(1)     $ 1,849

(1)  Reflects  increase to Accounts  Receivable  Reserves due to  acquisition of
     Mid-West and Hansford.
</TABLE>



                                       S-2
<PAGE>

                                INDEX TO EXHIBITS


  Exhibit No.   Description

      3.1       Restated   Certificate  of   Incorporation   of  the  Registrant
                effective  November  13,  1998  (filed  with the  Commission  as
                Exhibit 3 to the Company's Quarterly Report on Form 10-Q for the
                quarter  ended  December 27, 1998 filed with the  Commission  on
                February 10, 1999 and incorporated herein by reference thereto)

      3.3       Amended  By-Laws of the Registrant  (filed as Exhibit 3.2 to the
                Company's 1994 Registration  Statement on Form S-1, Registration
                No. 33-75174, filed with the Commission on February 11, 1994, as
                amended on March 22,  1994 (the "1994  Registration  Statement")
                and incorporated herein by reference thereto)

      4.1       Rights  Agreement  dated  as  of  August  18,  1997  between  DT
                Industries,  Inc. and ChaseMellon Shareholder Services,  L.L.C.,
                as Rights  Agent (filed as Exhibit 1 to the  Company's  Form 8-K
                dated August 18, 1997,  filed with the  Commission on August 19,
                1997 and incorporated herein by reference  thereto).  The Rights
                Agreement  includes  as  Exhibit A thereto  the  Certificate  of
                Designations, Preferences and Rights of Series A Preferred Stock
                of DT Industries,  Inc., as Exhibit B thereto the Form of Rights
                Certificate  and as Exhibit C thereto  the  Summary of Rights to
                Purchase Series A Preferred Stock.

      4.2       Amendment  No.  1 to the  Rights  Agreement  by and  between  DT
                Industries,  Inc. and ChaseMellon Shareholder Services,  L.L.C.,
                dated as of  November  5, 1998  (filed  with the  Commission  as
                Exhibit 10 to the  Company's  Quarterly  Report on Form 10-Q for
                the quarter ended  December 27, 1998,  filed with the Commission
                on  February  10,  1999 and  incorporated  hereby  by  reference
                thereto).

    10.1*       Purchase and Stockholder Agreement, dated September 30, 1993, by
                and between Detroit Tool and Engineering  Company and Stephen J.
                Gore (filed as Exhibit 10.1 to the 1994  Registration  Statement
                and incorporated herein by reference thereto)

    10.2*       Stock Pledge Agreement, dated September 30, 1993, by and between
                Stephen J. Gore and Detroit Tool and Engineering  Company (filed
                as  Exhibit  10.2  to  the  1994   Registration   Statement  and
                incorporated herein by reference thereto)

    10.3*       $84,600 Promissory Note, dated September 30, 1993, by Stephen J.
                Gore to Detroit Tool and  Engineering  Company (filed as Exhibit
                10.3 to the 1994 Registration  Statement and incorporated herein
                by reference thereto)

    10.4*       Letter  Agreement,  dated September 30, 1993, by Stephen J. Gore
                to Detroit Tool and  Engineering  Company (filed as Exhibit 10.4
                to the 1994  Registration  Statement and incorporated  herein by
                reference thereto)

    10.5*       Employment  Agreement,  dated September 19, 1990, by and between
                Detroit  Tool Group,  Inc. and Stephen J. Gore (filed as Exhibit
                10.5 to the 1994 Registration  Statement and incorporated herein
                by reference thereto)

    10.6*       Amendment to Promissory Note and Stock Pledge  Agreement,  dated
                March  16,  1994,  by  and  among  DT  Industries,   Inc.,  Peer
                Investors,  L.P.  and Stephen J. Gore (filed as Exhibit  10.6 to
                the 1994  Registration  Statement  and  incorporated  herein  by
                reference thereto)

    10.7*       DT  Industries,  Inc.  Employee  Stock  Option  Plan  (filed  as
                Exhibit   10.21   to   the   1994   Registration  Statement  and
                incorporated herein by reference thereto)

    10.8*       DT Industries,  Inc. 1994 Directors  Non-Qualified  Stock Option
                Plan   (filed  as   Exhibit  10.22   to  the  1994  Registration
                Statement and incorporated herein by reference thereto)

    10.9        Agreement  of  Lease,  dated  April  30,  1997,  between  Teecan
                Properties  Inc. and Kalish Canada Inc.  (filed as Exhibit 10.15
                to the Company's  Annual Report on Form 10-K for the fiscal year
                ended June 29, 1997 filed with the  Commission  on September 29,
                1997 (the "1997  10-K")  and  incorporated  herein by  reference
                thereto)

    10.10       Lease  Agreement,  dated  February  7,  1995,  between  Lanard &
                Axibund,  Inc.,  as agent,  I-95  Business  Center  at  Keystone
                Park-1,  as lessor,  and  Stokes-Merrill  Corporation  as lessee
                (filed as Exhibit 10.46 to the  Company's  Annual Report on Form
                10-K for the  fiscal  year  ended  June 25,  1995 filed with the
                Commission   on  September   25,  1995  (the  "1995  10-K")  and
                incorporated therein by reference thereto)


<PAGE>

   10.11*       Purchase and Stockholder Agreement,  dated November 30, 1993, by
                and between  Detroit Tool and  Engineering  Company and Bruce P.
                Erdel (filed as Exhibit 10.55 to the Company's  Annual Report on
                Form 10-K for the fiscal year ended June 26, 1994 filed with the
                Commission   on  September   23,  1994  (the  "1994  10-K")  and
                incorporated herein by reference thereto)

   10.12*       Stock Pledge Agreement,  dated November 30, 1993, by and between
                Bruce P. Erdel and Detroit Tool and  Engineering  Company (filed
                as Exhibit No. 10.56 to the 1994 10-K and incorporated herein by
                reference thereto)

   10.13*       $33,300  Promissory Note,  dated November 30, 1993,  by Bruce P.
                Erdel to Detroit Tool and Engineering  Company (filed as Exhibit
                No. 10.57  to the 1994 10-K and incorporated herein by reference
                thereto)

   10.14*       Letter Agreement, dated  November 30, 1993, by and between Bruce
                P. Erdel  and  Detroit Tool and  Engineering  Company (filed as
                Exhibit No. 10.58 to the 1994 10-K  and incorporated  herein  by
                reference thereto)

   10.15*       Amendment to Promissory Note and Stock Pledge  Agreement,  dated
                March  16,  1994,  by  and  among  DT  Industries,   Inc.,  Peer
                Investors,  L.P.  and Bruce P. Erdel (filed as Exhibit No. 10.59
                to the 1994 10-K and incorporated herein by reference thereto)

   10.16        Fourth Amended and Restated Credit Facilities  Agreement,  dated
                July 21, 1997, among NationsBank,  N.A.  (successor by merger to
                The Boatmen's  National Bank of St. Louis) and any other persons
                who become lenders as provided  therein and DT Industries,  Inc.
                and the other  borrowers  listed on the signature  pages thereof
                (filed as Exhibit 10.31 to the 1997 10-K and incorporated herein
                by reference thereto)

   10.17        First Amendment to Fourth Amended and Restated Credit Facilities
                Agreement,  dated as of December  31, 1997,  among  NationsBank,
                N.A., as  Administrative  Agent, and  NationsBank,  N.A. and the
                other Lenders  listed  therein and DT  Industries,  Inc. and the
                other  Borrowers  listed  therein  (filed as  Exhibit  10 to the
                Company's  Quarterly  Report on Form 10-Q for the quarter  ended
                March 29,  1998 filed with the  Commission  on May 12,  1998 and
                incorporated herein by reference thereto)

   10.18        Second   Amendment  to  Fourth   Amended  and  Restated   Credit
                Facilities  Agreement,   dated  as  of  April  30,  1998,  among
                NationsBank, as Administrative Agent, and NationsBank,  N.A. and
                the other Lenders listed therein and DT Industries, Inc. and the
                other Borrowers listed therein  (filed as Exhibit 10.22  to  the
                Company's Annual Report  on Form 10-K  for the fiscal year ended
                June 28, 1998 f iled  with the Commission  on September 25, 1998
                (the "1998 10-K") and incorporated herein by reference thereto).

    10.19       Third Amendment to Fourth Amended and Restated Credit Facilities
                Agreement, dated as of August 26, 1998, among NationsBank, N.A.,
                as  Administrative  Agent, and  NationsBank,  N.A. and the other
                Lenders  listed  therein and DT  Industries,  Inc. and the other
                Borrowers  listed  therein  (filed  as  Exhibit  10.23   to  the
                1998 10-K and incorporated herein by reference thereto).

    10.20       Lease  dated as of February  20,  1996 by and  between  CityWide
                Development  Corporation and Advanced Assembly Automation,  Inc.
                (filed as Exhibit 10 to the Company's  Quarterly  Report on Form
                10-Q  for the  quarter  ended  March  24,  1996  filed  with the
                Commission on May 3, 1996 and  incorporated  herein by reference
                thereto)

    10.21       Single-Tenant  Industrial  Business  Lease dated July 19,  1996,
                between American National Bank and Trust Company of Chicago,  as
                Trustee under Trust No. 63442, Landlord, and Mid-West Automation
                Enterprises,   Inc.,  an  Illinois   corporation   and  Mid-West
                Automation Systems, Inc., an Illinois corporation, collectively,
                Tenant  (filed as  Exhibit  No.  10.58 to the  Company's  Annual
                Report on Form 10-K for the  fiscal  year  ended  June 30,  1996
                filed  with the  Commission  on  September  30,  1996 (the "1996
                10-K") and incorporated herein by reference thereto)

   10.22*       DT Industries,  Inc.  Amendment  to  1994 Employee Stock  Option
                Plan,  adopted May 16, 1996  (filed as Exhibit 10.59 to the 1996
                10-K and incorporated herein by reference thereto)

   10.23*       DT Industries,  Inc. Second Amendment  to  1994  Employee  Stock
                Option,  adopted  September 18, 1996  (filed as Exhibit 10.60 to
                the 1996 10-K and incorporated herein by reference thereto)

   10.24*       DT Industries,  Inc.  1996  Long-Term  Incentive  Plan (filed as
                Exhibit 10.61  to  the  1996  10-K  and  incorporated  herein by
                reference thereto)


<PAGE>

   10.25*       Employment and Noncompetition  Agreement, dated August 28, 1995,
                between Kalish Canada Inc.  and  Graham Lewis  (filed as Exhibit
                No. 10.37  to the 1997 10-K and incorporated herein by reference
                thereto)

   10.26*       Employment  and  Noncompetition  Agreement,  dated  February 26,
                1997,  between DT Industries,  Inc. and Eugene R. Haffely (filed
                as Exhibit No. 10.38 to the 1997 10-K and incorporated herein by
                reference thereto)

    10.27       Lease  Agreement by and between Van Buren N. Hansford,  Jr., the
                Stockholder   and   Landlord,    and   Hansford    Manufacturing
                Corporation,  the Tenant,  dated as of September 30, 1996 (filed
                as Exhibit 10.3 to the Company's  Quarterly  Report on Form 10-Q
                for  the  quarter  ended  September  29,  1996  filed  with  the
                Commission  on  November  8,  1996 and  incorporated  herein  by
                reference thereto)

    10.28       Lease Agreement dated February 11, 1997 between Kersten Randolph
                Street Property and Mid-West Automation Enterprises, Inc. (filed
                as Exhibit 10.2 to the Company's  Quarterly  Report on Form 10-Q
                for the quarter  ended March 30, 1997 filed with the  Commission
                on May 12, 1997 and incorporated herein by reference thereto)

    10.29       Amended and Restated  Declaration  of Trust of DT Capital  Trust
                dated as of June 1, 1997 among DT Industries,  Inc., as Sponsor,
                the Bank of New York, as Property Trustee,  The Bank of New York
                (Delaware),  as Delaware Trustee,  and Stephen J. Gore, Bruce P.
                Erdel and Gregory D. Wilson,  as Trustees  (filed as Exhibit 4.2
                to  the   Company's   Registration   Statement   on  Form   S-3,
                Registration No. 333-30909, filed with the Commission on July 8,
                1997 (the "1997 Registration Statement") and incorporated herein
                by reference thereto)

    10.30       Indenture  for  the  7.16%   Convertible   Junior   Subordinated
                Deferrable Interest Debentures Due 2012 dated as of June 1, 1997
                among DT  Industries,  Inc. and The Bank of New York, as Trustee
                (filed as Exhibit  4.3 to the 1997  Registration  Statement  and
                incorporated herein by reference thereto)

    10.31       Preferred  Securities  Guarantee  Agreement  dated June 12, 1997
                between DT Industries,  Inc., as Guarantor,  and The Bank of New
                York, as Preferred  Guarantee  Trustee  (filed as Exhibit 4.6 to
                the 1997  Registration  Statement  and  incorporated  herein  by
                reference thereto)

    10.32       Umbrella  Agreement  relating to the Sale and Purchase of Assets
                of Lucas Assembly & Test Systems in the United Kingdom,  Germany
                and the United States of America,  dated July 29, 1997 (filed as
                Exhibit No.  10.52 to the 1997 10-K and  incorporated  herein by
                reference thereto)

    10.33       Agreement relating to the Sale and Purchase of the United States
                Assets of Lucas Assembly & Test Systems, dated July 29, 1997, by
                and among Lucas  Automation & Control  Engineering,  Inc., Lucas
                Industries plc and Assembly  Technology & Test,  Inc.  (filed as
                Exhibit No.  10.53 to the 1997 10-K and  incorporated  herein by
                reference thereto)

    10.34       Agreement  relating  to the Sale  and  Purchase  of the  English
                Assets of Lucas Assembly & Test Systems, dated July 29, 1997, by
                and among Lucas  Limited,  Assembly  Technology & Test  Limited,
                Lucas Industries plc and Lucas Automation & Control  Engineering
                Limited  (filed  as  Exhibit  No.  10.54  to the  1997  10-K and
                incorporated herein by reference thereto)

   10.35        Agreement relating to the Sale and Purchase of the German Assets
                of Lucas  Assembly & Test  Systems,  dated July 29, 1997, by and
                among  Lucas  Automation  &  Control   Engineering  GmbH,  Lucas
                Industries plc and Assembly Technologie & Automation GmbH (filed
                as Exhibit No. 10.55 to the 1997 10-K and incorporated herein by
                reference thereto)

   10.36        Industrial  Building Lease,  dated July 1991, by and between The
                Allen Group Inc.  and  Lucas Hartridge,  Inc.  (filed as Exhibit
                10.56  to  the  1997 10-K  and  incorporated herein by reference
                thereto)

   10.37*       DT Industries, Inc. Directors Deferred Compensation Plan

   10.38*       DT Industries, Inc. Non-Qualified Deferred Compensation Plan


<PAGE>

     11.0       Computation of Earnings Per Share

     21.0       Subsidiaries of the Registrant

     23.0       Consent of PricewaterhouseCoopers LLP

     24.0       Powers of Attorney

--------------------

*   Management contract or compensatory plan or arrangement.


<PAGE>

                                   SIGNATURES

Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  the  registrant  has duly  caused  this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                        DT INDUSTRIES, INC.

                                        By: /s/ Bruce P. Erdel
                                            ------------------------------------
                                            Bruce P. Erdel
                                            Senior Vice President - Finance
                                            and Administration
Dated:  September 27, 1999

     Pursuant to the  requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities indicated on September 27, 1999.

          Signatures                          Title
          ----------                          -----

               *                   Chairman of the Board
-------------------------------
        James J. Kerley

               *                   President, Chief Executive Officer and
-------------------------------    Director
        Stephen J. Gore            (Principal Executive Officer)

       /s/ Bruce P. Erdel          Senior Vice President - Finance and
-------------------------------    Administration
         Bruce P. Erdel            (Principal Financial and Accounting Officer)

               *                   Director
-------------------------------
       William H.T. Bush

               *                   Director
-------------------------------
        Charles A. Dill

               *                   President - Packaging Group and Director
-------------------------------
        Graham L. Lewis

               *                   Director
-------------------------------
        Lee M. Liberman

               *                   President - Automation Group and Director
-------------------------------
         John F. Logan

               *                   Director
-------------------------------
        Charles Pollnow


*By:   /s/ Bruce P. Erdel
     --------------------------
           Bruce P. Erdel
           Attorney-In-Fact

--------------------------
*   Such signature has been affixed pursuant to the following Power of Attorney.


<PAGE>

                                POWER OF ATTORNEY


     KNOW ALL MEN BY THESE PRESENTS,  that each person whose  signature  appears
below constitutes and appoints each of Stephen J. Gore and Bruce P. Erdel as his
true  and  lawful   attorney-in-fact   and  agent,   each  with  full  power  of
substitution,  for  him  and in his  name,  place  and  stead,  in any  and  all
capacities, to sign the 1999 Annual Report on Form 10-K of DT Industries,  Inc.,
and to file  the  same  with  all  exhibits  thereto,  and  other  documents  in
connection therewith, with the Securities and Exchange Commission, granting unto
each said  attorney-in-fact and agent full power and authority to do and perform
each and every act and thing  requisite and ratifying  and  confirming  all that
each  said  attorney-in-fact  and agent or his  substitute  or  substitutes  may
lawfully do or cause to be done by virtue hereof.