<PAGE>
================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

        (Mark One)

        [X]     Quarterly Report Pursuant to Section 13 or 15(d) of the
                Securities Exchange Act of 1934

                    FOR THE QUARTER ENDED SEPTEMBER 29, 2001

        [ ]     Transition report pursuant to Section 13 or 15(d) of the
                Securities Exchange Act of 1934 For the Period From _________ to
                __________.

                         Commission File Number: 0-24900
                                                 -------

                                INTERLOGIX, INC.
             (Exact name of Registrant as specified in its charter)

<TABLE>
<S>                                                                             <C>
                    DELAWARE                                                                        06-1340453
(State or other jurisdiction of incorporation or                                 (I.R.S. employer identification number)
                  organization)
</TABLE>

              114 WEST 7TH STREET, SUITE 1300, AUSTIN, TEXAS 78701

              (Address of principal executive offices and zip code)

                                 (512) 381-2760

              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section 12(b) of the Act:
                     Common Stock, par value $.01 per share
                     --------------------------------------

        Securities registered pursuant to Section 12(g) of the Act: None
                                                                    ----

        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 periods as 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
                                      ---      ---

        As of November 8, 2001, number of outstanding shares of the Registrant's
Common Stock was 19,558,246.

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

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S>               <C>                                                                                           <C>
PART I            FINANCIAL INFORMATION...........................................................................3

ITEM 1.           CONSOLIDATED FINANCIAL STATEMENTS

                  Consolidated balance sheets.....................................................................3

                  Consolidated statements of operations...........................................................4

                  Consolidated statements of stockholders' equity.................................................5

                  Consolidated statements of cash flows...........................................................6

                  Notes to consolidated financial statements......................................................7

ITEM 2.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........14

ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.....................................20


PART II           OTHER INFORMATION..............................................................................22

ITEM 1.           LEGAL PROCEEDINGS..............................................................................22

ITEM 2.           CHANGES IN SECURITIES AND USE OF PROCEEDS......................................................22

ITEM 3.           DEFAULTS UPON SENIOR SECURITIES................................................................22

ITEM 4.           SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................22

ITEM 5.           OTHER INFORMATION..............................................................................22

ITEM 6.           EXHIBITS AND REPORTS ON FORM 8-K...............................................................22

SIGNATURE         ...............................................................................................23
</TABLE>

                                      -2-
<PAGE>
ITEM 1.         CONSOLIDATED FINANCIAL STATEMENTS

                         INTERLOGIX, INC. AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS
                              (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                                                                  As of
                                                                                    ----------------------------------
                                                                                     September 29,     December 31,
                                                                                         2001              2000
                                                                                    ----------------------------------
                                                                                      (unaudited)
<S>                                                                                 <C>              <C>
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents...............................................         $       9.9      $      12.5
   Receivables, net .......................................................               131.7            131.6
   Inventories, net .......................................................                79.5             84.9
   Prepaids and other  ....................................................                16.3             14.8
                                                                                    ----------------------------------
         Total current assets..............................................               237.4            243.8

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of $63.0
   and $ 55.6, respectively................................................                59.9             50.4

OTHER ASSETS, net .........................................................                10.2              6.7

INTANGIBLES:
   Other intangible assets, net of accumulated amortization of $32.9 and
   $25.6, respectively.....................................................               131.1            136.6

   Goodwill, net of accumulated amortization of $56.5 and $48.4,
   respectively............................................................               190.2            195.5
                                                                                    ----------------------------------
         TOTAL ASSETS......................................................         $     628.8      $     633.0
                                                                                    ==================================

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Current portion of long-term debt.......................................                19.2             16.7
   Accounts payable and accrued expenses...................................                93.5            101.8
   Accounts payable - related party                                                         0.1              0.2
                                                                                    ----------------------------------
         Total current liabilities.........................................               112.8            118.7

LONG-TERM DEBT.............................................................               196.2            210.6
DEFERRED INCOME TAXES......................................................                48.0             46.0
OTHER NONCURRENT LIABILITIES...............................................                 9.7             10.7
                                                                                    ----------------------------------
         Total liabilities.................................................               366.7            386.0
                                                                                    ----------------------------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
   Common stock, par value $.01 per share; 60,000,000 shares authorized,
     20,503,347 issued and 19,546,647 outstanding at September 29, 2001;
     20,401,437 issued and 19,444,737 outstanding at December 31, 2000.....                 0.2              0.2
   Paid-in-capital.........................................................               238.1            234.9
   Treasury shares, at cost, 956,700 shares................................               (15.3)           (15.3)
   Retained earnings.......................................................                53.4             38.8
   Accumulated other comprehensive loss....................................               (14.3)           (11.6)
                                                                                    ----------------------------------
         Total stockholders' equity........................................               262.1            247.0
                                                                                    ----------------------------------
         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY........................         $     628.8      $     633.0
                                                                                    ==================================
</TABLE>

See accompanying notes

                                      -3-
<PAGE>

                       INTERLOGIX, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (DOLLARS IN MILLIONS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                  THREE MONTHS ENDED                   NINE MONTHS ENDED
                                           ---------------------------------  -------------------------------------
                                           SEPTEMBER 29,     SEPTEMBER 30,     SEPTEMBER 29,       SEPTEMBER 30,
                                                2001             2000               2001               2000
                                           ---------------  ----------------  -----------------  ------------------
<S>                                        <C>              <C>               <C>                <C>
REVENUES.............................      $        149.3   $        154.0    $         463.4    $      377.9

COST OF REVENUES.....................                86.6             87.8              265.8           220.8
                                           ---------------  ----------------  -----------------  ------------------

     Gross Profit....................                62.7             66.2              197.6           157.1

SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE...............                39.4             35.8              121.3            99.3

RESEARCH AND
DEVELOPMENT EXPENSES.................                 5.5              6.0               18.2            17.0

AMORTIZATION OF
INTANGIBLES..........................                 5.7              5.7               17.2            12.8


ACQUIRED IN-PROCESS
RESEARCH & DEVELOPMENT...............                 -                -                  -              37.8

RESTRUCTURING AND
OTHER CHARGES........................                 -                -                  -              11.1
                                           ---------------  ----------------  -----------------  ------------------

     Operating Income (loss).........                12.1             18.7               40.9           (20.9)

OTHER (INCOME) EXPENSE:
     Interest expense, net...........                 3.7              4.7               12.6             9.4
     Other, net......................                (0.3)             0.9                1.1            (1.2)
                                           ---------------  ----------------  -----------------  ------------------

     Income (loss) before taxes......                 8.7             13.1               27.2           (29.1)

INCOME TAX PROVISION                                  4.0              6.6               12.6             8.0
                                           ---------------  ----------------  -----------------  ------------------

NET INCOME (LOSS)....................      $          4.7   $          6.5    $          14.6    $      (37.1)
                                           ===============  ================  =================  ==================

Net Income (Loss) per share:
   Basic                                   $         0.24   $         0.33    $          0.75    $      (2.12)
   Diluted                                 $         0.24   $         0.33    $          0.74    $      (2.12)
Weighted Average Shares Outstanding:
   Basic                                       19,534,608       19,444,737         19,487,261      17,525,864
   Diluted                                     19,992,508       19,532,479         19,840,892      17,525,864
</TABLE>

See accompanying notes

                                      -4-
<PAGE>

                        INTERLOGIX, INC. AND SUBSIDIARIES

                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                              (DOLLARS IN MILLIONS)
<TABLE>
<CAPTION>


                                    Number of       Common         Paid-In       Treasury      Retained
                                     Shares          Stock         Capital         Stock       Earnings
                                  --------------  ------------  --------------  ------------  ------------
<S>                               <C>             <C>           <C>             <C>           <C>
Balance December 31, 1999           15,170,640    $   0.2       $   122.6       $   (15.3)    $   67.3
Comprehensive loss
------------------
     Net loss                                -        -               -               -          (28.5)
     Currency translation
     adjustment                              -        -               -               -            -

Total comprehensive loss                     -        -               -               -            -

Issue common stock in
connection with the Merger           4,268,372        -             111.2             -            -

Exercise of stock options                5,725        -               0.1             -            -
Compensation expense                         -        -               1.0             -            -
                                  --------------  ------------  --------------  ------------  ------------
Balance December 31, 2000           19,444,737    $   0.2       $   234.9       $   (15.3)    $   38.8
                                  --------------  ------------  --------------  ------------  ------------
Comprehensive income
--------------------
     Net income                              -        -               -               -            4.3
     Unrealized fair value of
     derivative instruments                  -        -               -               -            -
     Currency translation
     adjustment                              -        -               -               -            -

Total comprehensive income                   -        -               -               -            -

Exercise of stock options               18,550        -               0.4             -            -
Compensation expense                         -        -               0.3             -            -
                                  --------------  ------------  --------------  ------------  ------------
Balance March 31, 2001
(unaudited)                         19,463,287    $   0.2       $   235.6       $   (15.3)    $   43.1
                                  --------------  ------------  --------------  ------------  ------------
Comprehensive income
--------------------
     Net income                              -        -               -               -            5.6
     Unrealized fair value of
     derivative instruments                  -        -               -               -            -
     Currency translation
     adjustment                              -        -               -               -            -

Total comprehensive income                   -        -               -               -            -

Exercise of stock options               44,549        -               0.9             -            -
Compensation expense                         -        -               0.3             -            -
                                  --------------  ------------  --------------  ------------  ------------
Balance June 30, 2001
(unaudited)                         19,507,836    $   0.2       $   236.8       $   (15.3)    $   48.7
                                  --------------  ------------  --------------  ------------  ------------
Comprehensive income
--------------------
     Net income                              -        -               -               -            4.7
     Unrealized fair value of
     derivative instruments                  -        -               -               -            -
     Currency translation
     adjustment                              -        -               -               -            -

Total comprehensive income                   -        -               -               -            -

Exercise of stock options               38,811        -               1.0             -            -

Compensation expense                         -        -               0.3             -            -
                                  --------------------------------------------------------------------------
Balance September 29, 2001
(unaudited)                         19,546,647    $   0.2       $   238.1       $   (15.3)    $   53.4
                                  ==========================================================================

<CAPTION>
                                    Accumulated
                                       Other
                                   Comprehensive
                                        Loss             Total
                                  -----------------  --------------
<S>                               <C>                <C>
Balance December 31, 1999             $   (7.9)       $   166.9
Comprehensive loss
------------------
     Net loss                               -             (28.5)
     Currency translation
     adjustment                           (3.7)            (3.7)
                                                     --------------
Total comprehensive loss                   -              (32.2)
                                                     --------------
Issue common stock in
connection with the Merger                 -              111.2

Exercise of stock options                  -                0.1
Compensation expense                       -                1.0
                                  -----------------  --------------
Balance December 31, 2000            $   (11.6)       $   247.0
                                  -----------------  --------------
Comprehensive income
--------------------
     Net income                            -                4.3
     Unrealized fair value of
     derivative instruments               (0.3)            (0.3)
     Currency translation
     adjustment                           (3.9)            (3.9)
                                                     --------------
Total comprehensive income                 -                0.1
                                                     --------------
Exercise of stock options                  -                0.4
Compensation expense                       -                0.3
                                  -----------------  --------------
Balance March 31, 2001
(unaudited)                          $   (15.8)       $   247.8
                                  -----------------  --------------
Comprehensive income
--------------------
     Net income                            -                5.6
     Unrealized fair value of
     derivative instruments                0.1              0.1
     Currency translation
     adjustment                           (1.2)            (1.2)
                                                     --------------
Total comprehensive income                 -                4.5
                                                     --------------
Exercise of stock options                  -                0.9
Compensation expense                       -                0.3
                                  -----------------  --------------
Balance June 30, 2001
(unaudited)                          $   (16.9)       $   253.5
                                  -----------------  --------------
Comprehensive income
--------------------
     Net income                            -                4.7
     Unrealized fair value of
     derivative instruments               (0.3)            (0.3)
     Currency translation
     adjustment                            2.9              2.9
                                                     --------------
Total comprehensive income                 -                7.3
                                                     --------------
Exercise of stock options                  -                1.0

Compensation expense                       -                0.3
                                  ---------------------------------
Balance September 29, 2001
(unaudited)                          $   (14.3)       $   262.1
                                  =================================
</TABLE>

See accompanying notes

                                      -5-
<PAGE>

                       INTERLOGIX, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOW
                              (DOLLARS IN MILLIONS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      NINE MONTHS ENDED
                                                                               ---------------------------------
                                                                               SEPTEMBER 29,     SEPTEMBER 30,
                                                                                    2001             2000
                                                                               ---------------  ----------------
<S>                                                                            <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net Income (Loss)...............................                               $  14.6         $ (37.1)
   Adjustments to reconcile net income (loss) to net
     cash provided by (used in) operating activities--
       Depreciation and amortization...............                                  29.0            23.0
       Amortization of deferred revenue, net of direct costs                         (3.6)           (2.7)
       Write-off of acquired in-process research
         and development costs.....................                                   -              37.8
       Write-off of intangible assets..............                                   -               7.3
       Changes in assets and liabilities--
           Accounts receivable, net................                                  (2.9)          (23.6)
           Inventories, net........................                                   1.6            (9.0)
           Prepaid expenses and other..............                                  (4.9)           (0.6)
           Accounts payable and accrued expenses...                                  (5.3)           (0.6)
                                                                               ---------------  ----------------
       Net cash provided by (used in) operating activities                           28.5            (5.5)
                                                                               ---------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Acquisitions, net of cash received..............                                  (3.1)         (170.3)
   Capital expenditures............................                                 (17.0)          (14.6)
   Proceeds from sale of capital assets............                                   -               0.1
   Proceeds from sale of notes receivable..............                               -              20.8
   Other, net......................................                                  (0.9)           (5.6)
                                                                               ---------------  ----------------
      Net cash used in investing activities........                                 (21.0)         (169.6)
                                                                               ---------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from borrowings........................                                  68.3           267.8
   Repayment of long-term debt.....................                                 (80.5)          (82.2)
   Proceeds from exercise of stock options.........                                   2.3             -
                                                                               ---------------  ----------------
     Net cash provided by (used in) financing
          activities...............................                                  (9.9)          185.6
                                                                               ---------------  ----------------

EFFECT OF EXCHANGE RATE CHANGES ON CASH............                                  (0.2)           (0.4)
                                                                               ---------------  ----------------

     Net increase (decrease) in cash and cash equivalents                            (2.6)           10.1

CASH AND CASH EQUIVALENTS, beginning of period.....                                  12.5            21.6
                                                                               ---------------  ----------------

CASH AND CASH EQUIVALENTS, end of period...........                               $   9.9         $  31.7
                                                                               ===============  ================

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash Paid for:
   Interest........................................                               $  11.8         $  10.1
   Income Taxes....................................                               $  18.4         $   9.6
</TABLE>

See accompanying notes

                                      -6-
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)



1.      OVERVIEW

        Interlogix, Inc. (the "Company"), a Delaware corporation (formerly known
        as ITI Technologies, Inc. ("ITI")), was incorporated in 1992. Pursuant
        to the terms of an Agreement and Plan of Merger and Reorganization, SLC
        Technologies, Inc. ("SLC"), a wholly owned subsidiary of Berwind LLC,
        formerly Berwind Group Partners ("Berwind"), a private company, merged
        with and into the Company, with the Company surviving. Since Berwind
        obtained a controlling interest in the Company the merger transaction
        was accounted for as a reverse acquisition of the Company by SLC.
        Accordingly, the financial statements of the Company consist of the
        historical accounts of SLC with the results of ITI included beginning on
        May 2, 2000. Concurrently with the transaction, the Company changed its
        name to Interlogix, Inc.

        The Company designs, develops, manufactures and distributes a broad
        range of components, systems and services for security, life safety and
        lifestyle enhancements. These solutions are directed toward the
        requirements of both business and consumers on a global basis. The
        Company's products and services are provided through an array of
        channels, including direct sales, wholesale distribution, specialized
        distribution and system integrators. The Company has sales and technical
        support operations in 25 countries and manufacturing and logistics
        operations in the United States, Europe, South Africa, Australia and
        China. The Company is represented by the following brand names: Aritech,
        Caddx, Casi-Rusco, ESL, Fiber Options, GBC, ITI, Kalatel, Sentrol, Supra
        and Tecom.

        The weighted average common shares outstanding as well as common stock,
        paid-in capital, stock options and the other components of stockholders'
        equity have been retroactively restated to give effect to the
        recapitalization that occurred as a result of the reverse merger.

2.      BASIS OF PRESENTATION

        The unaudited consolidated financial statements for the three and nine
        month periods ended September 29, 2001 and September 30, 2000, reflect,
        in the opinion of management of the Company, all normal, recurring
        adjustments necessary for a fair statement of the results of operations
        for the interim periods. The results of operations for any interim
        period are not necessarily indicative of results for the full year. The
        consolidated balance sheet data as of December 31, 2000 was derived from
        the audited consolidated financial statements but does not include all
        disclosures required by generally accepted accounting principles. The
        unaudited consolidated financial statements should be read in
        conjunction with the consolidated financial statements and notes thereto
        included in the Company's current Annual Report on Form 10-K, filed with
        the Securities and Exchange Commission on April 2, 2001.

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

        Certain reclassifications have been made to the prior period to conform
        to the current year presentation.

                                      -7-
<PAGE>

3.      INVENTORIES, NET

        Inventories, net are composed of:

<TABLE>
<CAPTION>
                                                   September 29, 2001                December 31, 2000
                                                   ------------------                -----------------
<S>                                                    <C>                               <C>
         Raw materials                                 $     49.5                        $     47.4
         Work-in-process                                      8.3                              14.1
         Finished goods                                      29.7                              30.6
                                                       ----------                        ----------
                                                             87.5                              92.1
         Less: Inventory reserve                              8.0                               7.2
                                                       ----------                        ----------
                                                       $     79.5                        $     84.9
                                                       ==========                        ==========
</TABLE>

4.      PROPERTY, PLANT AND EQUIPMENT, NET

        Property, plant and equipment, net are composed of:

<TABLE>
<CAPTION>
                                                   Useful life        September 29, 2001           December 31, 2000
                                                   -----------        ------------------           -----------------
                                                     (years)
<S>                                                   <C>                 <C>                         <C>
         Land                                           -                  $   0.3                     $      0.3
         Buildings                                    30-40                    2.1                            2.1
         Machinery and equipment                       7-12                   66.7                           64.0
         Furniture and fixtures                        5-10                   23.1                           21.0
         Leasehold improvements                        2-7                     4.9                            4.4
         ERP and other                                 3-7                    21.8                           14.2
         Leased assets                                 5-7                     4.0                              -
                                                                           -------                     ----------
                                                                             122.9                          106.0

         Less: Accumulated depreciation                                       63.0                           55.6
                                                                           -------                     ----------

                                                                           $  59.9                     $     50.4
                                                                           =======                     ==========
</TABLE>

        Depreciation expense for the nine months ended September 29, 2001 and
        September 30, 2000 was $11.8 million and $9.9 million, respectively.

                                      -8-
<PAGE>

5.      LONG-TERM DEBT

        Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                       September 29, 2001            December 31, 2000
                                                       ------------------            -----------------
<S>                                                        <C>                          <C>
         Revolving credit facility                         $   125.0                    $  128.1
         Term facility                                          90.0                        97.5
         Other                                                   0.4                         1.7
                                                           ---------                    --------
                                                               215.4                       227.3
         Less: current portion                                  19.2                        16.7
                                                           ---------                    --------
                                                           $   196.2                    $  210.6
                                                           =========                    ========
</TABLE>

        Effective with the Merger described in Note 1, the Company entered into
        a five year $325.0 million senior, first priority, secured facility
        composed of a multi-currency revolving facility in the amount of $225.0
        million and a term facility in the amount of $100.0 million. The credit
        facilities bear interest, at the discretion of Interlogix, at either (a)
        the greater of the prime rate, or the federal funds effective rate plus
        0.5%, or (b) Libor plus, a margin of 0.25% to 1.75% based on the
        Company's leverage ratio.

        The credit facility was used to finance the merger transaction, to
        refinance SLC's previous bank debt obligations, to provide for working
        capital and for general corporate purposes. The revolver is due May
        2005. The term facility will be amortized in equal quarterly
        installments in the following percentages of the initial principal
        amount of the term facility for each year: (1) Year 1-10%, (2) Year
        2-15%, (3) Year 3-20%, (4) Year 4-25% and (5) Year 5-30%. Commitment
        fees ranging from 0.25% to 0.375% depending on the Company's leverage
        ratio, are payable on the undrawn portion of the revolving facility.
        This credit agreement contains certain restrictive covenants, including
        the prohibition of the payment of dividends on common stock. The credit
        agreement also contains affirmative covenants including the maintenance
        of certain financial ratios as defined in the agreement. As of September
        29, 2001, the Company was in compliance with all covenants. The Company
        incurred debt issue costs of $3.8 million, which are being amortized
        over the life of the credit facility.

        At September 29, 2001, the Company had borrowings of $215.0 million and
        had $65.0 million available under its $325.0 million credit facility. At
        September 29, 2001, the weighted average interest rate charged for
        borrowings under the credit facility, including the effect of interest
        rate swap contracts, was 4.97%.

6.      EARNINGS PER SHARE

        Basic EPS is computed by dividing net income available to common
        stockholders by the actual weighted average number of common shares
        outstanding for the period. Diluted EPS is computed assuming the
        conversion of all dilutive securities, which only includes stock options
        for the Company. For periods prior to May 2, 2000, shares outstanding
        include only the common stock and stock options of SLC. As discussed in
        Note 1, the weighted-average common shares outstanding have been
        retroactively restated to give effect to the recapitalization, which
        occurred as a result of the merger transaction.

        Since the Company had a net loss for the nine-month period ended
        September 30, 2000, the potential effect of common stock equivalents
        would have an anti-dilutive effect. As a result, the average number of
        common shares outstanding is the same for purposes of computing basic
        and diluted EPS for the period.

        The following table summarizes the number of shares outstanding and
        diluted weighted average shares outstanding used to compute diluted EPS:

                                      -9-
<PAGE>

<TABLE>
<CAPTION>
                                                Three Months Ended                    Nine Months Ended
                                       ----------------------------------     ----------------------------------
                                        September 29,     September 30,         September 29,    September 30,
                                        --------------    --------------        --------------   --------------
                                             2001              2000                  2001             2000
                                             ----              ----                  ----             ----
<S>                                        <C>               <C>                   <C>              <C>
                 Basic                     19,534,608        19,444,737            19,487,261       17,525,864

                 Dilutive impact of
                 options                      457,900            87,742               353,631                -
                                           ----------        ----------            ----------       ----------

                 Diluted                   19,992,508        19,532,479            19,840,892       17,525,864
                                           ==========        ==========            ==========       ==========
</TABLE>

7.      SEGMENT REPORTING

        Through December 31, 2000, the Company reported on a geographic basis
        with two reportable segments, which included the Americas (North,
        Central and South America) and Europe (Europe and Africa). Effective
        January 1, 2001, the Company modified its organizational structure and
        as a result changed its reportable segments. The Company now operates
        its business on a geographic basis with three reportable segments, which
        include North America; Europe and Africa; and Rest of World.
        Additionally, the Company has three business groups, which operate
        within each geographic segment. These business groups include security
        and lifesafety, enterprise technologies, and key management products and
        services. Segment information for the three and nine months ended
        September 30, 2000 has been restated to give effect to the change in the
        reportable segments.

        The Company evaluates the performance of its geographic segments based
        on operating profit, excluding amortization expense and certain
        corporate charges. Results of Europe and Africa have been converted to
        United States dollars at the average exchange rate for the period.

        The following table presents geographic segment information.

<TABLE>
<CAPTION>
                                                           Three Months Ended            Nine Months Ended
                                                      ----------------------------  ----------------------------

                                                      September 29,  September 30,  September 29,  September 30,
                                                      -------------  -------------  -------------  -------------
                                                           2001           2000           2001          2000
                                                           ----           ----           ----          ----
<S>                                                      <C>            <C>            <C>            <C>
         SALES:
         ------
         North America                                   $  94.6        $ 102.8        $ 299.6        $ 236.1
         Europe and Africa                                  41.2           38.3          123.8          113.0
         Rest of World                                      13.5           12.9           40.0           28.8
                                                            ----           ----           ----           ----
         Total Sales                                     $ 149.3        $ 154.0        $ 463.4        $ 377.9
                                                         =======        =======        =======        =======
         OPERATING PROFIT:
         -----------------
         North America                                   $  10.4        $  20.4        $ 37.8         $ 34.1
         Europe and Africa                                   4.3            3.6          13.5           10.1
         Rest of World                                       3.7            2.7           9.7            4.7
                                                             ---            ---           ---            ---
         Total Operating Profit                          $  18.4        $  26.7        $ 61.0         $ 48.9
                                                         =======        =======        ======         ======
</TABLE>

        Geographic segment operating profit does not include charges for
        restructuring, amortization expense and corporate charges. A
        reconciliation of geographic segment operating profit to operating
        income reported in the consolidated statements of operations is as
        follows:

                                      -10-
<PAGE>

<TABLE>
<CAPTION>
                                                           Three Months Ended             Nine Months Ended
                                                      -----------------------------  -----------------------------

                                                      September 29,   September 30,  September 29,   September 30,
                                                      -------------   -------------  -------------   -------------
                                                          2001            2000          2001            2000
                                                          ----            ----          ----            ----
<S>                                                      <C>            <C>            <C>             <C>
         RECONCILIATION:
         ---------------
         Geographic segment operating profit             $  18.4        $  26.7        $ 61.0          $  48.9
         Amortization expense                               (5.7)          (5.7)        (17.2)           (12.8)
         Acquired in-process research and development          -              -             -            (37.8)
         Restructuring and other charges                       -              -             -            (11.1)
         Other expenses and corporate charges               (0.6)          (2.3)         (2.9)            (8.1)
                                                         -------        -------        ------          -------
         Operating income per Statement of Operations    $  12.1        $  18.7        $ 40.9          $ (20.9)
                                                         =======        =======        ======          =======
</TABLE>

<TABLE>
<CAPTION>
                                                           September 29, 2001            December 31, 2000
                                                           ------------------            -----------------
<S>                                                            <C>                             <C>
         TOTAL ASSETS:
         -------------
         North America                                         $ 498.6                         $ 506.7
         Europe and Africa                                        92.3                            86.1
         Rest of World                                            37.9                            40.2
                                                                  ----                            ----
         Total Assets                                          $ 628.8                         $ 633.0
                                                               =======                         =======

</TABLE>


        The following table presents business group information on a global
        reporting basis.

<TABLE>
<CAPTION>
                                                           Three Months Ended               Nine Months Ended
                                                      -----------------------------   -----------------------------

                                                      September 29,   September 30,   September 29,   September 30,
                                                      -------------   -------------   -------------   -------------
                                                           2001            2000            2001            2000
                                                           ----            ----            ----            ----
<S>                                                      <C>            <C>              <C>             <C>
         SALES:
         ------
         Security and Lifesafety                         $  95.5        $   97.2         $ 291.3         $ 236.4
         Enterprise Technologies                            37.1            33.5           109.7            92.3
         Key Management                                     16.7            23.3            62.4            49.2
                                                            ----            ----            ----            ----
         Total Sales                                     $ 149.3        $  154.0         $ 463.4         $ 377.9
                                                         =======        ========         =======         =======
         OPERATING PROFIT:
         -----------------
         Security and Lifesafety                         $  15.1        $   16.7         $  43.8         $  31.4
         Enterprise Technologies                             3.6             3.3            11.9             7.8
         Key Management                                      1.1             7.3             9.4            12.1
                                                             ---             ---             ---            ----
         Business Group Operating Profit                 $  19.8        $   27.3         $  65.1         $  51.3
                                                         =======        ========         =======         =======
</TABLE>

                                      -11-
<PAGE>

        Business group operating profit does not include charges for
        restructuring, amortization expense and corporate charges. A
        reconciliation of business group operating profit to operating income
        reported in the consolidated statements of operations is as follows:

<TABLE>
<CAPTION>
                                                           Three Months Ended               Nine Months Ended
                                                      -----------------------------   -----------------------------

                                                      September 29,   September 30,   September 29,   September 30,
                                                      -------------   -------------   -------------   -------------
                                                           2001            2000            2001            2000
<S>                                                      <C>            <C>              <C>             <C>
         RECONCILIATION:
         ---------------
         Business group operating profit                 $  19.8        $   27.3         $  65.1         $  51.3
         Amortization expense                               (5.7)           (5.7)          (17.2)          (12.8)
         Acquired in-process research and development          -               -               -           (37.8)
         Restructuring and other charges                       -               -               -           (11.1)
         Other expenses and corporate charges               (2.0)           (2.9)           (7.0)          (10.5)
                                                         -------        --------         -------         -------
         Operating income per Statement of Operations    $  12.1        $   18.7         $  40.9         $ (20.9)
                                                         =======        ========         =======         =======
</TABLE>


8.      DERIVATIVES

        Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting
        for Derivative Instruments and Hedging Activities" and SFAS No. 138,
        "Accounting for Certain Derivative Instruments and Certain Hedging
        Activities - An Amendment of FASB Statement No. 133." These
        pronouncements establish accounting and reporting standards for
        derivative instruments, including certain derivative instruments
        embedded in other contracts (collectively referred to as derivatives),
        and for hedging activities. Upon adoption, the cumulative transition
        adjustment was insignificant.

        Interest Rate Swap Agreements

        The Company has interest rate swap agreements in place with the intent
        of managing its exposure to interest rate risk on its existing debt
        obligation. Accordingly, the company currently has three outstanding
        agreements to effectively convert LIBOR based variable-rate debt to
        fixed-rate debt.

        The Company considers these agreements to be cash flow hedging
        instruments. Under SFAS No. 133, in order to consider these agreements
        as hedges, (i) the Company must designate the instrument as a hedge of
        future transactions, and (ii) the contract must reduce the Company's
        exposure in the risk of changes in interest rates. If the above criteria
        are not met, the Company will record the market value of the contract at
        the end of each month on the balance sheet and will recognize a related
        gain or loss in the statement of operations. Net receipts or payments
        under these agreements are recognized as an adjustment to interest
        expense, while changes in the fair market value of these hedges are not
        recognized in income. The Company will recognize the fair market value
        of the hedges in income at the time of maturity, sale or termination,
        though the Company does not anticipate the sale or termination of these
        instruments. The fair value of interest rate swaps is the estimated
        amount that the bank would receive or pay to terminate the swap
        agreements at the reporting date, taking into account current market
        conditions and interest rates.

        At September 29, 2001, the notional amount of the contracts in place was
        $30.0 million, which were effective as of December 31, 1998, and mature
        in 2005. The Company will receive variable rate payments (equal to the
        three month LIBOR rate) from the third parties and is obligated to pay
        fixed interest rate payments (weighted average rate equal to 5.862%) to
        the third parties during the term of the contracts. The net unrealized
        loss, which equals the fair values, net of tax, on the interest rate
        swaps at September 29, 2001 was $0.5 million, and was included in
        accrued expenses in the Company's balance sheet and recorded as other
        comprehensive loss in the statement of stockholders' equity.

                                      -12-
<PAGE>

        The net gain or loss during the nine months ended September 29, 2001
        related to the ineffective portion of the interest rate swap agreements
        was not material. The Company did not discontinue any hedges.

        Foreign Currency Contracts

        It is the purpose of the Company's foreign exchange risk management
        policy to minimize its cash flow exposure to adverse changes in currency
        and exchange rates. This is accomplished by identifying and evaluating
        the risk that the Company's cash flows will decline in value due to
        changes in foreign currency exchange rates and by determining the
        appropriate strategies necessary to manage such exposures. The Company's
        objective is to maintain economically balanced currency risk management
        strategies that provide adequate downside protection. Forward exchange
        contracts are designated as a hedge at inception when there is a direct
        relationship to the exchange risk associated with the Company's cash
        flow. The Company formally documents all relationships between hedging
        instruments and hedged items, as well as its risk-management objectives
        and strategy for undertaking various hedge transactions. This process
        includes relating all derivatives to specific firm commitments or
        forecasted transactions. The Company also formally assesses, both at the
        inception of the hedge and on an ongoing basis, whether each derivative
        is highly effective in offsetting changes of the hedged item. As the
        terms of the forward exchange contract and the underlying transaction
        are matched at inception, forward contract effectiveness is calculated
        by comparing the fair value of the contract to the change in the forward
        value of the anticipated transaction, with the effective portion of the
        gain or loss on the derivative instrument reported as a component of
        other comprehensive income. Contract effectiveness is calculated by
        comparing the intrinsic value of the effective portion of changes in
        fair value accumulated in other comprehensive income. Ineffectiveness in
        the nine months ended September 29, 2001 was not significant. Changes in
        the fair value of a derivative that is not designated as a hedge are
        recorded immediately in earnings.

        As of September 29, 2001, the Company had outstanding foreign exchange
        contracts with notional amounts totaling approximately $5.6 million. The
        year to date net unrealized loss, net of tax, on foreign exchange
        contracts at September 29, 2001 was $30,000, and was included in accrued
        expenses in the Company's balance sheet. This amount was recorded as
        other comprehensive income in the statement of stockholders' equity.

9.      RECENTLY ISSUED ACCOUNTING STANDARDS

        On July 23, 2001 the Financial Accounting Standards Board released for
        issuance Statement of Financial Accounting Standards ("SFAS") No. 141,
        "Business Combinations" and No. 142 "Goodwill and Other Intangible
        Assets". SFAS No. 141 requires that all business combinations subsequent
        to June 30, 2001 to be accounted for under the purchase method of
        accounting. The pooling-of-interests method is no longer allowed. SFAS
        NO. 142 requires that upon adoption, amortization of goodwill will cease
        and instead, the carrying value of goodwill will be evaluated for
        impairment on at least an annual basis. SFAS No. 142 is effective for
        fiscal years beginning after December 15, 2001. The Company is
        evaluating the impact of adoption of these standards and has not yet
        determined the effect of adoption on its financial position and results
        of operations.

        In August 2001, the Financial Accounting Standards Board released SFAS
        No. 144, "Accounting for the Impairment or Disposal of Long-Lived
        Assets." SFAS No. 144 establishes a single accounting model, based upon
        the framework established in SFAS No. 121, for long-lived assets to be
        disposed of by sale. SFAS No. 144 broadens the presentation of
        discontinued operations to include more disposal transactions, and also
        provides additional implementation guidance for SFAS No. 121. SFAS No.
        144 is effective for fiscal years beginning after December 15, 2001. The
        Company anticipates adopting SFAS No. 144 effective January 1, 2002, and
        management does not expect the adoption to have a material impact on the
        Company's financial position and results of operations.

                                      -13-
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

        Interlogix, Inc. (the "Company"), a Delaware corporation (formerly known
        as ITI Technologies, Inc. ("ITI")), was incorporated in 1992. Pursuant
        to the terms of an Agreement and Plan of Merger and Reorganization, SLC
        Technologies, Inc. ("SLC"), a wholly owned subsidiary of Berwind LLC,
        formerly known as Berwind Group Partners ("Berwind"), a private company,
        merged with and into the Company, with the Company surviving (the
        "Merger"). Since Berwind obtained a controlling interest in the Company,
        the Merger was accounted for as a reverse acquisition of the Company by
        SLC (see discussion in Note 1 to the consolidated financial statements).
        Accordingly, the financial statements of the Company consist of the
        historical accounts of SLC with the results of ITI included beginning on
        May 2, 2000. Concurrently with the transaction, the Company changed its
        name to Interlogix, Inc.

        UNAUDITED RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED
        SEPTEMBER 29, 2001 AND SEPTEMBER 30, 2000

        The following tables illustrate results of operations for the periods
        indicated and the percentages for which certain items of income and
        expense relate to net sales:

<TABLE>
<CAPTION>
                                                           Three Months Ended               Nine Months Ended
                                                      -----------------------------   -----------------------------

                                                      September 29,   September 30,   September 29,   September 30,
                                                      -------------   -------------   -------------   -------------
                                                           2001            2000            2001            2000
                                                           ----            ----            ----            ----
<S>                                                      <C>            <C>              <C>             <C>
         Revenues  ................................      $ 149.3        $  154.0         $ 463.4         $ 377.9
                                                         -------        --------         -------         -------
         Gross profit  ............................         62.7            66.2           197.6           157.1
         Selling, general and administrative  .....         39.4            35.8           121.3            99.3
         Research and development  ................          5.5             6.0            18.2            17.0
         Amortization of intangibles  .............          5.7             5.7            17.2            12.8
         Acquired in-process research and development          -               -               -            37.8
         Restructuring and other charges  .........            -               -               -            11.1
                                                         -------        --------         -------         -------
         Operating income (loss)...................         12.1            18.7            40.9           (20.9)
                                                         -------        --------         -------         -------
         Interest expense, net  ...................          3.7             4.7            12.6             9.4
         Other (Income) expense, net  .............         (0.3)            0.9             1.1            (1.2)
                                                         -------        --------         -------         -------
         Income (loss) before taxes................          8.7            13.1            27.2           (29.1)
         Income tax provision   ...................          4.0             6.6            12.6             8.0
                                                         -------        --------         -------         -------
         Net income (loss)  .......................      $   4.7        $    6.5         $  14.6         $ (37.1)
                                                         =======        ========         =======         =======
</TABLE>

<TABLE>
<CAPTION>
                                                           Three Months Ended               Nine Months Ended
                                                      -----------------------------   -----------------------------

                                                      September 29,   September 30,   September 29,   September 30,
                                                      -------------   -------------   -------------   -------------
                                                           2001            2000            2001            2000
                                                           ----            ----            ----            ----
<S>                                                      <C>            <C>              <C>             <C>
         Revenues  ................................       100.0%          100.0%          100.0%          100.0%
                                                         -------        --------         -------         -------
         Gross profit  ............................        42.0%           43.0%           42.6%           41.6%
         Selling, general and administrative  .....        26.4%           23.2%           26.2%           26.3%
         Research and development  ................         3.7%            3.9%            3.9%            4.5%
         Amortization of intangibles  .............         3.8%            3.7%            3.7%            3.4%
         Acquired in-process research and development         -               -               -            10.0%
         Restructuring and other charges  .........           -               -               -             2.9%
                                                         -------        --------         -------         -------
         Operating income (loss) ..................         8.1%           12.2%            8.8%           (5.5%)
                                                         -------        --------         -------         -------
         Interest expense, net  ...................         2.5%            3.1%            2.7%            2.5%
         Other (Income) expense, net  .............        (0.2%)           0.6%            0.2%           (0.3%)
                                                         -------        --------         -------         -------
         Income (loss) before taxes................         5.8%            8.5%            5.9%           (7.7%)
         Income tax provision......................         2.7%            4.3%            2.7%            2.1%
                                                         -------        --------         -------         -------
         Net income (loss) ........................         3.1%            4.2%            3.2%           (9.8%)
                                                         =======        ========         =======         =======
</TABLE>

                                      -14-
<PAGE>

        THREE AND NINE MONTHS ENDED SEPTEMBER 29, 2001 COMPARED WITH THREE AND
        NINE MONTHS ENDED SEPTEMBER 30, 2000

        Revenues. Revenues decreased from $154.0 million for the three months
        ended September 30, 2000 to $149.3 million for the three months ended
        September 29, 2001, which represents an decrease of $4.7 million, or
        3.1%. Revenues increased from $377.9 million for the nine months ended
        September 30, 2000 to $463.4 million for the nine months ended September
        29, 2001, which represents an increase of $85.5 million, or 22.6%.
        Revenues were adversely impacted in the third quarter due to the key
        management product group internally financing its Supra Advantage
        Express III (AEIII) products through operating leases with customers.
        The relationship with its previous third-party financing provider ceased
        because the provider had reached its internal loan concentration limits.
        The impact of this change was a deferral of $6.4 million in revenues
        that would have been recognized had third-party financing been available
        under terms similar to the previous agreement. Revenues from internally
        financed sales are being recognized ratably over the lease period.
        Revenue growth of $3.6 million in the quarter for the enterprise
        technology group was driven by demand for the digital video product
        offering.

        The increase in revenues for the nine-month period is due in part to the
        inclusion of ITI for 2001, as compared to only partial inclusion in 2000
        due to the merger on May 2. ITI revenues were $102.7 million for the
        nine months ended September 29, 2001 compared to $57.2 million for the
        partial period in 2000. Excluding the impact of incremental ITI sales,
        total revenues increased by 10.6% over the nine months ended September
        30, 2000. This increase is net of the adverse impact for exchange rate
        translation adjustments of $ 6.3 million for the nine-month period.

        Excluding incremental sales due to the inclusion of ITI, revenues for
        the security and lifesafety group increased $9.4 million or 4.0% for the
        nine months ended September 29, 2001. Contributing to the sales increase
        for this group was revenue growth in Europe and Africa with growth of
        15.1% excluding exchange rate fluctuations. In addition, during the
        first quarter of 2000, revenues were constrained in the United States by
        an inventory reduction program by a major distributor. Sales within the
        key management business group increased $13.2 million or 26.8% over the
        nine months ended September 20, 2000. This growth resulted primarily
        from incremental business in the real estate market generated from the
        Supra Advantage Express III product offering. Shipments for this product
        line started in the third quarter of 2000. The digital video product
        line was the primary contributor to the increase in enterprise
        technology revenues by $17.4 million or 18.9%, over the nine months
        ended September 30, 2000. This growth was due to increased volumes
        resulting from acceptance of digital video surveillance products.
        Contracts received from city transit systems for digital video recorder
        products also supported increased sales. During the nine months ended
        September 29, 2001 this group received $8.5 million in orders from
        transit systems in Chicago and New Orleans.

        Gross Profit. As a percentage of revenues, gross profit was 42.0% for
        the three months ended September 29, 2001 versus 43.0% for the three
        months ended September 30, 2000. As a percentage of revenues, gross
        profit was 42.6% for the nine months ended September 29, 2001 versus
        41.6% for the nine months ended September 30, 2000. Gross profit margins
        declined in the current quarter due to the key management products group
        internally financing sales of AEIII products. The impact of this change
        was a decrease in gross profit of $3.6 million. Gross profit as a
        percentage of revenues for the three and nine months ended September 29,
        2001 would have been 42.7% and 42.9%, respectively, had third party
        financing been available. Also contributing to the decline in gross
        profit during the current quarter over the same quarter in 2000 was a
        decrease in sales related to the access control business relative to its
        fixed cost base.

                                      -15-
<PAGE>
        Merger related inventory adjustments of $5.3 million during the nine
        months ended September 30, 2000 resulted in a lower gross profit
        percentage for the 2000 periods.

        Selling, General and Administrative Expenses. Selling, general and
        administrative expenses increased from $35.8 million for the three
        months ended September 30, 2000 to $39.4 million for the three months
        ended September 29, 2001 which represents an increase of $3.6 million or
        10.1%. As a percentage of sales, selling, general and administrative
        expenses were 26.4% for the three months ended September 29, 2001 versus
        23.2% for the comparable period in 2000. Selling, general and
        administrative expenses increased from $99.3 million for the nine months
        ended September 30, 2000 to $121.3 million for the nine months ended
        September 29, 2001 which represents an increase of $22.0 million or
        22.2%. As a percentage of sales, selling, general and administrative
        expenses were 26.2% for the nine months ended September 29, 2001 versus
        26.3% for the comparable period in 2000. The inclusion of ITI during the
        first half of the year contributed $9.1 million of incremental expense
        during the nine months ended September 29, 2001. Other increases in
        selling, general and administrative expenses are primarily related to
        infrastructure investments made in the enterprise technologies and key
        management businesses. Revenue growth for these groups was $30.6
        million, or 21.6% of sales for the nine-month period. Incremental
        infrastructure expenditures supporting the growth of the digital video
        product offering were $4.2 million for the nine months. Also included in
        2001 spending were costs related to establishing and staffing a
        corporate office in Austin, Texas.

        Research and Development Expenses. Research and development expenses
        decreased from $6.0 million for the three months ended September 30,
        2000 to $5.5 million for the three months ended September 29, 2001 which
        represents an decrease of $0.5 million, or 8.3%. As a percentage of
        sales, research and development expenses were 3.7% for the three months
        ended September 29, 2001 versus 3.9% for the three months ended
        September 30, 2000. Research and development expenses increased from
        $17.0 million for the nine months ended September 30, 2000 to $18.2
        million for the nine months ended September 29, 2001 which represents an
        increase of $1.2 million, or 7.1%. As a percentage of sales, research
        and development expenses were 3.9% for the nine months ended September
        29, 2001 versus 4.5% for the nine months ended September 30, 2000.
        Synergies resulting from the elimination of duplicate development
        activities in the intrusion control panel program for the security and
        lifesafety group as a result of the Merger, contributed to the reduction
        in spending. These synergies contributed to improvements in research and
        development expenses as a percentage of sales for both the three and
        nine-month periods ended September 29, 2001 over comparable periods in
        the prior year. Increased research and development expenses during the
        nine months ended September 29, 2001 were due to the inclusion of ITI,
        which contributed $1.4 million of incremental expense over the prior
        comparable period. Engineering investments made in 2001 in the
        enterprise technologies business included investments in developing the
        next generation integrated platform for access control systems and
        digital video recording systems.

        Amortization of Intangible Assets. The amortization of intangible assets
        was $5.7 million for both the three months ended September 29, 2001 and
        September 30, 2000. The amortization of intangible assets increased from
        $12.8 million for the nine months ended September 30, 2000 to $17.2
        million for the nine months ended September 29, 2001, which represents
        an increase of $4.4 million or 34.4%. The increase in amortization of
        intangible assets for the nine-month period is due to the addition of
        approximately $222.6 million of intangible assets, including goodwill,
        as a result of the Merger. The identifiable intangible assets include
        technology, patents, trademarks, and other intangible property and are
        being amortized over their estimated useful lives ranging from 7 to 20
        years.

        Interest Expense, Net. Net interest expense decreased from $4.7 million
        for the three months ended September 30, 2000 to $3.7 million for the
        three months ended September 29, 2001, which represents a decrease of
        $1.0 million or 21.3%. Net interest expense increased from $9.4 million
        for the nine months ended September 30, 2000 to $12.6 million for the
        nine months ended September 29, 2001, which represents an increase of
        $3.2 million or 34.0%. The decrease in interest expense in the current
        quarter as compared to the third quarter of 2000 is a result of a lower
        average debt balance of approximately $26.0 million for the quarter
        ended September 29, 2001 and a decline in interest rates. The net
        increase in interest expense in the nine-month period as compared to the
        same period last year is due to increased borrowings of $173.0 million
        during the second quarter 2000. These funds were used to finance the
        incremental debt associated with the Merger.

                                      -16-
<PAGE>

        Other (Income) Expense, Net. Other income, net of other expense was $0.3
        million for the three months ended September 29, 2001 compared to other
        expense, net of other income of $0.9 million for the three months ended
        September 30, 2000. The results for the current quarter include currency
        exchange gains of approximately $0.8 million as compared to currency
        exchange losses of $1.0 million in the comparable quarter of the prior
        year. Other expense, net of other income was $1.1 million for the nine
        months ended September 29, 2001 compared to other income, net of other
        expense of $1.2 million for the nine months ended September 30, 2000.
        Contributing to other net income for the nine months ended September 30,
        2000 was the settlement of a patent infringement lawsuit in the amount
        of $2.5 million.

        Income Tax Provision. Income taxes decreased from $6.6 million for the
        three months ended September 30, 2000 to $4.0 million for the three
        months ended September 29, 2001, which represents an decrease of $2.6
        million. The effective tax rate was 46.0% for the three months ended
        September 29, 2001, compared to an effective tax rate of 50.4% for the
        three months ended September 30, 2000. Income tax expense increased from
        $8.0 million for the nine months ended September 30, 2000 to $12.6
        million for the nine months ended September 29, 2001, which represents
        an increase of $4.6 million. The effective tax rate was 46.3% for the
        nine months ended September 29, 2001, compared to an effective tax rate
        of (27.5%) for the nine months ended September 30, 2000. The effective
        tax rate in 2000 was affected by the increase in non-deductible charges
        for goodwill, non-deductible restructuring charges and the write-off of
        the acquired research and development related to the Merger. Generally,
        the Company's effective tax rate differs from the statutory rate on
        ordinary income due to different tax rates applicable to foreign income,
        amortization of non-deductible goodwill, state income taxes and
        recognition of tax credits.

        SEGMENT INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                           Three Months Ended               Nine Months Ended
                                                      -----------------------------   -----------------------------

                                                      September 29,   September 30,   September 29,   September 30,
                                                      -------------   -------------   -------------   -------------
                                                           2001            2000            2001            2000
<S>                                                      <C>            <C>              <C>             <C>
         SALES:
         ------
         North America                                   $  94.6        $  102.8         $ 299.6         $ 236.1
         Europe, and Africa                                 41.2            38.3           123.8           113.0
         Rest of World                                      13.5            12.9            40.0            28.8
                                                         -------        --------         -------         -------
         Total Sales                                     $ 149.3        $  154.0         $ 463.4         $ 377.9
                                                         =======        ========         =======         =======

         OPERATING PROFIT:
         -----------------
         North America                                   $  10.4        $   20.4         $  37.8         $  34.1
         Europe, and Africa                                  4.3             3.6            13.5            10.1
         Rest of World                                       3.7             2.7             9.7             4.7
                                                         -------        --------         -------         -------
         Total Operating Profit                          $  18.4        $   26.7         $  61.0         $  48.9
                                                         =======        ========         =======         =======
</TABLE>


        Segment operating profit does not include amortization expense,
        restructuring charges, and certain corporate charges. A reconciliation
        of segment operating profit to operating income as presented in the
        financial statements can be found in Note 7 to the consolidated
        financial statements.

        Sales. Net customer sales for North America decreased from $102.8
        million for the quarter ended September 30, 2000 to $94.6 million for
        the quarter ended September 29, 2001, a decrease of $8.2 million or
        8.0%. The impact of internally financing the AEIII product offering on
        revenues was $6.4 million during the current period. For the nine months
        ended September 29, 2001 sales increased from $236.1 million to $299.6
        million over the comparable period in 2000, which represents an increase
        of $63.5 million or 26.9%. The increase is partially due to $45.5
        million of incremental sales resulting from the inclusion of ITI.
        Additionally, increases were a result of growth of $30.6 million within
        the key management and enterprise technologies groups. Sales of digital
        video and recorder products under the Kalatel brand increased $19.2
        million over the same nine-month period in 2000. The success of the
        Supra

                                      -17-
<PAGE>

        Advantage Express III platform provided the key management business
        group with incremental sales of $16.9 million for the nine months ended
        September 29, 2001. This product line was introduced to the market in
        the third quarter of 2000.

        Net sales for Europe and Africa for the three months ended September 29,
        2001 were $41.2 million as compared to $38.3 million for same period in
        2000. Excluding the impact of foreign currency translation adjustments
        of $0.9 million, sales growth in the third quarter for Europe and Africa
        would have been 9.9% as compared to 2000. Sales of $123.8 million for
        the nine months ended September 29, 2001 were $10.8 million, or 9.6%
        higher than the comparative period for 2000. Sales growth was also
        supported by the introduction of expanded offerings in the closed
        circuit television product line.

        Sales for Rest of World were $13.5 million for the quarter ended
        September 29, 2001 as compared to $12.9 million for the quarter ended
        September 30, 2000. For the nine months ended September 29, 2001 sales
        were $40.0 versus $28.8 million for the comparable period in 2000. The
        inclusion of incremental ITI sales into this region during the current
        nine-month period accounts for the increase. Growth has been limited in
        part due to an economic downturn, particularly in the Australian
        marketplace.

        Operating Profit. For the three and nine months ended September 29, 2001
        operating profit for North America was $10.4 million and $37.8 million,
        or $11.0% and 12.6% of sales, respectively. This compares with $20.4
        million and $34.1 million, or 19.8% and 14.4% of sales, for the three
        and nine months ended September 30, 2000, respectively. Contributing to
        the decline in profit as a percent of sales in the current quarter was a
        change in the key management business as a result of the group
        internally financing its AEIII product offering. Operating profit would
        have been approximately $3.6 million higher had third-party financing
        been available under terms similar to the previous program. Excluding
        the impact of internally financing the AEIII product offering in the
        current quarter, there were improvements in relative operating profit
        margins during the nine months that can be attributed to higher profits
        associated with the wireless ITI product offering and the introduction
        of the AEIII product line. Synergies realized from the Merger in the
        areas of global procurement initiatives and merger related expense
        savings contributed to improved operating income ratios. The additional
        volumes over the prior year supported increased leverage of the fixed
        cost base of the North American operation.

        Operating profit for Europe and Africa for the three and nine months
        ended September 29, 2001 was $4.3 million and $13.5 million, or 10.4%
        and 10.9% of sales, respectively. This performance was an improvement
        from the 9.4% and 8.9% operating profit ratios to sales in three and
        nine months ended September 30, 2000, respectively. The impact of the
        strengthening U.S. dollar on U.S. sourced products adversely impacted
        operating profit by approximately $1.7 million for the current year to
        date period.

        Operating profit in Rest of World for the three and nine months ended
        September 29, 2001 was $3.7 million and $9.7 million, respectively, as
        compared to $2.7 million and $4.7 million, respectively, for the
        comparable periods in 2000. ITI's incremental contribution to operating
        profit in this geographic region accounted for most of the increase
        during the nine-month period as compared to the prior year.

        LIQUIDITY, CAPITAL RESOURCES AND OTHER FINANCIAL DATA

        Cash flow from operations, supplemented with proceeds from debt
        financing, historically has provided funding for the Company's capital
        spending and acquisition objectives. Cash flow from operations and
        financing activities are expected to meet the Company's currently
        anticipated resource requirements.

        CAPITAL EXPENDITURES

        Capital expenditures for the nine months ended September 29, 2001 were
        $17.0 million versus $14.6 million for the nine months ended September
        30, 2000. During 2001, the Company has continued to invest in a common
        information technology platform to both encompass worldwide operations
        and provide the capability to undertake electronic commerce activities.

                                      -18-
<PAGE>

        FINANCING AND CAPITAL STRUCTURE

        Effective with the merger transaction described in Note 1, the Company
        entered into a five year $325.0 million senior, first priority, secured
        facility composed of a multi-currency revolving facility in the amount
        of $225.0 million and a term facility in the amount of $100.0 million.
        At September 29, 2001, the Company had $65.0 million available to borrow
        under the revolving facility, and had repaid $10.0 million of its $100.0
        million term facility. The credit facility also includes up to $17.0
        million for letters of credit of which $3.6 million are unused at
        September 29, 2001.

        The credit facilities bear interest, at the discretion of Interlogix, at
        either (a) the greater of the prime rate, or the federal funds effective
        rate plus 0.5%, or (b) Libor plus, a margin of 0.25% to 1.75% based on
        the Company's leverage ratio. Commitment fees ranging from 0.25% to
        0.375% depending on the Company's leverage ratio, are payable on the
        undrawn portion of the revolving facility. This credit agreement
        contains certain restrictive covenants, including the prohibition of the
        payment of dividends on common stock. The credit agreement also contains
        affirmative covenants including the maintenance of certain financial
        ratios as defined in the agreement. As of September 29, 2001, the
        Company was in compliance with all covenants.

        WORKING CAPITAL

        Working capital, excluding cash, at September 29, 2001 was $114.7
        million compared to $112.6 million at December 31, 2000, an increase of
        $2.1 million. The increase in working capital is due primarily to
        reductions in accounts payable and accrued expenses offset by increases
        in short term debt maturities.

        RECENTLY ISSUED ACCOUNTING STANDARDS

        On July 23, 2001 the Financial Accounting Standards Board released for
        issuance Statement of Financial Accounting Standards ("SFAS") No. 141,
        "Business Combinations" and No. 142 "Goodwill and Other Intangible
        Assets". SFAS No. 141 requires that all business combinations subsequent
        to September 29, 2001 to be accounted for under the purchase method of
        accounting. The pooling-of-interests method is no longer allowed. SFAS
        No. 142 requires that upon adoption, amortization of goodwill will cease
        and instead, the carrying value of goodwill will be evaluated for
        impairment on at least an annual basis. SFAS No. 142 is effective for
        fiscal years beginning after December 15, 2001. The Company is
        evaluating the impact of adoption of these standards and has not yet
        determined the effect of adoption on its financial position and results
        of operations.

        In August 2001, the Financial Accounting Standards Board released SFAS
        No. 144, "Accounting for the Impairment or Disposal of Long-Lived
        Assets." SFAS No. 144 establishes a single accounting model, based upon
        the framework established in SFAS No. 121. for long-lived assets to be
        disposed of by sale. SFAS No. 144 broadens the presentation of
        discontinued operations to include more disposal transactions, and also
        provides additional implementation guidance for SFAS No. 121. SFAS No.
        144 is effective for fiscal years beginning after December 15, 2001. The
        Company anticipates adopting SFAS No. 144 effective January 1, 2002, and
        management does not expect the adoption to have a material impact on the
        Company's financial position and results of operation.

        KEY MANAGEMENT OUTLOOK

        The Company's Supra Division has historically arranged for its real
        estate customers to finance product purchases through leases from a
        third party financial institution. This financial institution has
        advised the Company that internal loan concentration limits will not
        permit it to continue to finance these leases. The Company is actively
        negotiating with alternative sources of customer financing, but it is
        unclear when the Company will reach an agreement. The Company has not
        reached a commitment for the alternative financing as of this date.

                                      -19-
<PAGE>

                           FORWARD-LOOKING STATEMENTS

        This Form 10-Q contains forward-looking statements relating to the
        financial condition, results of operations, plans, objectives, future
        performance and business of Interlogix, Inc. ("Interlogix" or the
        "Company"). These statements include, without limitation, statements
        preceded by, followed by or that include the words "believes,"
        "expects," "anticipates," "estimates" or similar expressions. These
        forward-looking statements involve risks and uncertainties. Actual
        results may differ materially from those contemplated by the
        forward-looking statements due to factors discussed in the Company's
        current Annual Report on Form 10-K, filed with the Securities and
        Exchange Commission on April 2, 2001, including the following:

        -       increases in the competitive environment among intrusion, fire
                protection, access control, video surveillance and integrated
                system companies, including the potential effect of industry
                consolidation;

        -       changes in or unexpected unfavorable general economic conditions
                in the states or countries in which Interlogix is doing
                business;

        -       change in currency exchange rates, particularly between the U.S.
                Dollar and the Euro;

        -       legislative or regulatory changes that adversely affect the
                businesses in which Interlogix is engaged;

        -       difficulties in the technical, operational and/or strategic
                integration of Interlogix; and

        -       obsolescence of the technology of Interlogix.



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company is exposed to market risk from changes in interest rates and
        foreign exchange rates. The Company periodically utilizes interest rate
        swap agreements and forward exchange agreements to hedge a portion of
        these exposures. The Company does not use derivatives or other financial
        instruments for trading purposes. The Company's management believes the
        risk of incurring material losses related to credit risk is remote. The
        Company's derivative and other financial instruments consist of cash,
        accounts receivable, accounts payable, long-term debt (including current
        portion), foreign currency exchange contracts and interest rate swaps.
        The utilization of the Company's derivative financial instruments is
        described more fully in the Note 8 to the consolidated financial
        statements.

        Interest Rate Risk

        The Company's debt portfolio, including interest rate swap agreements,
        as of September 29, 2001, is composed of revolving and term debt
        denominated in U.S. dollars. Substantially all of the Company's debt was
        variable-rate at September 29, 2001, however $30.0 million of this debt
        was effectively fixed at 5.862% with an interest rate swap. A change in
        interest rates on the variable portion of the debt portfolio impacts the
        interest incurred and cash flows, but does not impact the net financial
        instrument position. Based on the variable-rate debt included in the
        Company's debt portfolio as of September 29, 2001, a 100 basis point
        increase in interest rates would result in an additional $1.8 million in
        interest incurred per year. A 100 basis point decline would lower
        interest incurred by $1.8 million.

                                      -20-
<PAGE>
        Foreign Currency Exchange Rate Risk

        The primary currencies for which the Company has foreign currency
        exchange rate exposure are the U.S. dollar versus the Euro, Irish pound,
        Dutch guilder, French franc, Australian dollar and German mark. Foreign
        currency debt and foreign exchange forward contracts are occasionally
        used in countries where the Company does business, thereby reducing the
        Company's net asset exposure. Foreign exchange forward and option
        contracts are used on occasion to hedge the Company's firm and highly
        anticipated foreign currency cash flows. As of September 29, 2001, the
        Company was a party to foreign currency hedging instruments with
        notional amounts totaling approximately $5.6 million.

                                      -21-
<PAGE>

        PART II OTHER INFORMATION



        ITEM 1. LEGAL PROCEEDINGS

                From time to time, the Company is involved in various litigation
                matters arising in the ordinary course of its business. In
                September 2001, the Company was served with a complaint in a
                lawsuit filed in the Northern District Court of Illinois on
                August 10, 2001 by The Chamberlain Group, Inc., a manufacturer
                of garage door openers. The Chamberlain Group alleges that the
                Company's manufacture and sale of wireless security systems
                infringes two of The Chamberlain Group's patents. The
                Chamberlain Group is seeking money damages and injunctive
                relief. The Company is currently investigating The Chamberlain
                Group's claims, but is unable to assess the likelihood of
                whether The Chamberlain Group will be successful based on the
                merits of its claims or the potential impact any injunctive
                relief or damages that may be awarded to The Chamberlain Group
                could have on the Company and its business. The Company believes
                that it has a number of valid defenses to The Chamberlain
                Group's claims, and it intends to vigorously contest the action.
                Currently, the Company's management is of the opinion that the
                ultimate disposition of these claims should not have a material
                adverse effect on the Company's financial position, cash flows,
                or results of operations.



        ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

                Not applicable.



        ITEM 3. DEFAULTS UPON SENIOR SECURITIES

                Not applicable.



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

                Not applicable.



        ITEM 5. OTHER INFORMATION

                Not applicable.



        ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

                a.      Exhibits

                        None.

                b.      Reports on Form 8-K

                        None.

                                      -22-
<PAGE>

                                   SIGNATURES

Pursuant to the requirements 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.

                                     INTERLOGIX, INC.


                                     By:  /s/        Kenneth L. Boyda
                                          --------------------------------------
                                                    Kenneth L. Boyda
                                          President and Chief Executive Officer
                                          (principal executive officer)

                                     By:  /s/        John R. Logan
                                          --------------------------------------
                                                    John R. Logan
                                          Senior Vice President and Chief
                                          Financial Officer
                                          (principal financial and accounting
                                          officer)


                                     DATED: NOVEMBER 9, 2001
                                            ----------------

                                      -23-