<PAGE>   1








                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                    FORM 10-Q


                   QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


                      For Quarter Ended September 30, 1996
                         Commission File Number 1-12410



                                  SIMULA, INC.
             (Exact name of registrant as specified in its charter)


              Arizona                                   86-0320129
     (State of Incorporation)             (I.R.S. Employer Identification No.)

    2700 N. Central Ave., Suite 1000, Phoenix, Arizona                 85004
          (Address of principal executive office)                   (Zip Code)


                                 (602) 631-4005
                         (Registrant's telephone number,
                              including area code)


                                   829206 10 1
                                 (CUSIP Number)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for past 90 days.

                (1)                       YES  X                     NO
                (2)                       YES  X                     NO

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date:


<TABLE>
<CAPTION>
                                                               Outstanding at
                   Class                                     September 30, 1996
                   -----                                     ------------------

<S>                                                               <C>      
        Common Stock, $.01 par value                              8,977,623
</TABLE>
<PAGE>   2
                                  SIMULA, INC.

                                      INDEX


PART I - FINANCIAL INFORMATION


<TABLE>
<CAPTION>
                                                                                       PAGE
                                                                                       ---- 
<S>                                                                                    <C>
Item 1 - Interim Consolidated Financial Statements

         Consolidated Balance Sheets
         September 30, 1996 and December 31, 1995.....................................   2

         Consolidated Statements of Operations
              Three Months and Nine Months Ended September 30, 1996 and 1995..........   3

         Consolidated Statement of Shareholders' Equity
              Nine Months Ended September 30, 1996 ...................................   4

         Consolidated Statements of Cash Flows
              Nine Months Ended September 30, 1996 and 1995...........................   5

         Notes to Interim Consolidated Financial Statements ..........................   6

Item 2 - Management's Discussion and Analysis of
              Results of Operations and Financial Condition...........................   9


PART II - OTHER INFORMATION

Item 5 - Other Information ...........................................................  13

Item 6 - Exhibits ....................................................................  13

SIGNATURE.............................................................................  15
</TABLE>


                                       1
<PAGE>   3
PART I - FINANCIAL INFORMATION
ITEM 1 - INTERIM CONSOLIDATED FINANCIAL STATEMENTS

                                  SIMULA, INC.
                           CONSOLIDATED BALANCE SHEETS
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                           ASSETS                             September 30, 1996     December 31, 1995
                                                              ------------------     -----------------

<S>                                                               <C>                 <C>        
CURRENT ASSETS:
     Cash and cash equivalents                                    $  3,698,715        $ 3,175,172
     Contract and trade receivables  - net                          24,936,961         25,221,504
     Income taxes receivable                                         4,056,440
     Inventories                                                    16,375,590          8,104,194
     Prepaid expenses and other                                        798,418            762,836
                                                                  ------------        -----------

     Total current assets                                           49,866,124         37,263,706

PROPERTY, EQUIPMENT AND LEASEHOLD
     IMPROVEMENTS - NET                                             21,235,922         15,778,819
DEFERRED COSTS                                                         993,322          6,385,328
INTANGIBLES - NET                                                   13,473,850         13,870,005
OTHER ASSETS                                                         1,218,517          1,441,278
                                                                  ------------        -----------

     TOTAL ASSETS                                                 $ 86,787,735        $74,739,136
                                                                  ============        ===========

             LIABILITIES & SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
     Revolving line of credit                                     $  2,350,000
     Trade accounts payable                                          7,340,621        $ 7,884,141
     Other accrued liabilities                                       3,941,586          2,607,849
     Advances on contracts                                           1,146,871          3,920,533
     Deferred income taxes                                               8,000              8,000
     Current portion of long-term debt                               4,067,392          1,367,187
                                                                  ------------        -----------

     Total current liabilities                                      18,854,470         15,787,710

LONG-TERM DEBT - Less current portion                               24,926,001         11,261,365
DEFERRED INCOME TAXES                                                  158,000            158,000
                                                                  ------------        -----------

     TOTAL LIABILITIES                                              43,938,471         27,207,075
                                                                  ------------        -----------

SHAREHOLDERS' EQUITY:
     Preferred stock, $.05 par value - authorized
         50,000,000 shares; no shares issued or outstanding
     Common stock, $.01 par value - authorized
         50,000,000 shares; issued 8,977,623 (1996) and
          8,970,626(1995) shares                                        89,776             89,706
     Additional paid-in capital                                     38,741,806         37,981,759
     Retained earnings                                               4,017,682          9,740,434
     Treasury stock, at cost - 82,500 shares (1995)                                      (279,838)
                                                                  ------------        -----------

     Total shareholders' equity                                     42,849,264         47,532,061
                                                                  ------------        -----------

     TOTAL LIABILITIES & SHAREHOLDERS' EQUITY                     $ 86,787,735        $74,739,136
                                                                  ============        ===========
</TABLE>

See notes to interim consolidated financial statements.


                                       2
<PAGE>   4
                                  SIMULA, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED                  NINE MONTHS ENDED
                                                                           SEPTEMBER 30,                      SEPTEMBER 30,
                                                                   -----------------------------     ----------------------------
                                                                      1996             1995             1996            1995
                                                                   ------------     ------------     ------------     -----------

<S>                                                                <C>              <C>              <C>              <C>        
REVENUE                                                            $ 12,914,643     $ 14,856,257     $ 49,272,985     $43,658,227

COST OF  REVENUE                                                     10,765,168        9,396,431       38,560,137      27,983,514
                                                                   ------------     ------------     ------------     -----------

GROSS MARGIN                                                          2,149,475        5,459,826       10,712,848      15,674,713

ADMINISTRATIVE EXPENSES                                               4,920,884        4,183,626       12,997,502      10,839,714
                                                                   ------------     ------------     ------------     -----------

OPERATING  (LOSS) INCOME                                             (2,771,409)       1,276,200       (2,284,654)      4,834,999

INTEREST EXPENSE                                                        685,083          378,809        1,476,334       1,349,236
                                                                   ------------     ------------     ------------     -----------

(LOSS) INCOME BEFORE TAXES                                           (3,456,492)         897,391       (3,760,988)      3,485,763

INCOME TAX (BENEFIT) EXPENSE                                         (1,369,000)        (241,791)      (1,490,000)        793,509
                                                                   ------------     ------------     ------------     -----------

(LOSS) EARNINGS BEFORE CUMULATIVE EFFECT
 OF A CHANGE IN ACCOUNTING  PRINCIPLE                                (2,087,492)       1,139,182       (2,270,988)      2,692,254

CUMULATIVE EFFECT ON PRIOR YEARS (TO
    DECEMBER 31, 1995) OF CHANGING ACCOUNTING
    FOR PRE-CONTRACT COSTS - Net of related income tax
    benefit of $2,160,000                                                                               3,239,948
                                                                   ------------     ------------     ------------     -----------

NET (LOSS) EARNINGS                                                ($ 2,087,492)    $  1,139,182     ($ 5,510,936)    $ 2,692,254
                                                                   ============     ============     ============     ===========

Per share amounts:
     (Loss) earnings  before cumulative effect of a change
      in accounting principle                                            ($0.23)           $0.13           ($0.26)          $0.33
     Cumulative effect on prior years (to December 31, 1995)
         of changing accounting for pre-contract costs                                                      (0.36)
                                                                   ------------     ------------     ------------     -----------
     Net (loss) earnings                                                 ($0.23)           $0.13           ($0.62)          $0.33
                                                                   ============     ============     ============     ===========

Weighted average shares outstanding                                   8,972,221        9,060,515        8,935,259       8,179,680
                                                                   ============     ============     ============     ===========
</TABLE>

See notes to interim consolidated financial statements.


                                       3
<PAGE>   5


                                  SIMULA, INC.
                 CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                      NINE MONTHS ENDED SEPTEMBER 30, 1996

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

<TABLE>
<CAPTION>
                                         Class A     
                              ------------------------------         Additional                                          Total
                                 Issued         Common Stock          Paid-in           Retained         Treasury     Shareholders'
                                 Shares             Amount            Capital           Earnings           Stock          Equity
                               ----------        -----------        ------------      -----------        ---------      -----------

<S>                             <C>              <C>                <C>               <C>                <C>            <C>        
BALANCE, JANUARY 1, 1996        8,970,627        $    89,706        $ 37,981,759      $ 9,740,434        $(279,838)     $47,532,061

Issuance of common
 shares for options                89,496                895             827,244                                            828,139


Retirement of
 treasury stock                   (82,500)              (825)            (67,197)        (211,816)         279,838                0

Net loss                                                                               (5,510,936)                       (5,510,936)
                               ----------        -----------        ------------      -----------        ---------      -----------

BALANCE,
SEPTEMBER 30, 1996              8,977,623        $    89,776        $ 38,741,806      $ 4,017,682        $       0      $42,849,264
                               ==========        ===========        ============      ===========        =========      ===========
</TABLE>


See notes to interim consolidated financial statements.


                                       4
<PAGE>   6


                                  SIMULA, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

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

<TABLE>
<CAPTION>
                                                                                   NINE MONTHS ENDED SEPTEMBER 30,
                                                                                  --------------------------------
                                                                                      1996                1995
                                                                                  ------------        ------------
<S>                                                                               <C>                 <C>         
OPERATING ACTIVITIES:
     Net (loss) earnings                                                          ($ 5,510,936)       $  2,692,254
     Adjustment to reconcile net (loss) earnings to net cash used by
operating activities:
          Depreciation and amortization                                              2,232,454           1,751,921
          Gain on sale of property and equipment                                                          (185,693)
          Cumulative effect of change in accounting                                  5,399,948
     Changes in assets and liabilities:
          Contract and trade receivables                                            (2,489,119)         (9,515,669)
          Income tax receivable                                                     (4,056,440)
          Inventories                                                               (7,742,511)            554,470
          Prepaid expenses and other                                                   (35,582)         (1,341,944)
          Deferred costs                                                                     0          (3,181,548)
          Other assets                                                                 222,761            (658,526)
          Trade accounts payable                                                      (543,520)         (1,276,207)
          Other accrued liabilities                                                  1,333,737             542,126
                                                                                  ------------        ------------
     Net cash used by operating activities                                         (11,189,208)        (10,618,816)
                                                                                  ------------        ------------

INVESTING ACTIVITIES:
     Purchase of property and equipment                                             (6,166,684)         (1,990,262)
     Proceeds from sale of property and equipment                                                          442,700
     Costs incurred to obtain intangibles                                             (444,325)           (355,418)
                                                                                  ------------        ------------
     Net cash  used in investing activities                                         (6,611,009)         (1,902,980)
                                                                                  ------------        ------------

FINANCING ACTIVITIES:
     Net borrowings (repayments) under revolving line of credit and                  2,350,000          (3,050,000)
       short-term debt
     Borrowings under long-term equipment lines of credit                            2,676,445           2,363,509
     Issuance of Series C Notes - net of issuance costs                             13,656,500
     Principal payments on long-term debt                                           (1,187,324)         (5,344,592)
     Issuance of common shares - net of expenses                                       828,139          26,497,203
                                                                                  ------------        ------------
     Net cash provided in financing activities                                      18,323,760          20,466,120
                                                                                  ------------        ------------

NET INCREASE  IN CASH                                                                  523,543           7,944,324

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                       3,175,172           1,051,177
                                                                                  ------------        ------------

CASH AND CASH EQUIVALENTS, END OF PERIOD                                          $  3,698,715        $  8,995,501
                                                                                  ============        ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
     Taxes paid                                                                   $    287,575        $  1,348,826
                                                                                  ============        ============
     Interest paid                                                                $    830,267        $  1,187,980
                                                                                  ============        ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING
ACTIVITIES:
     Property and equipment acquired under capital leases                         $    575,720        $    299,171
                                                                                  ============        ============
     Purchase accounting adjustments related to the acquisitions of Coach &
          Car and Artcraft:
          Additional liabilities offset against seller note payable                                   $  1,438,000
                                                                                                      ============
          Additional liabilities recognized upon final allocation of                                  
           purchase price                                                                             $  2,415,000
                                                                                                      ============
</TABLE>


See notes to interim consolidated financial statements.


                                       5
<PAGE>   7
                                  SIMULA, INC.
               NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - BASIS OF PRESENTATION:

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with the instructions to Form 10-Q. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of Management, all adjustments and
reclassifications considered necessary for a fair and comparable presentation
have been included and are of a normal recurring nature. Operating results for
the three and nine months ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1996.

The Company announced a 3 for 2 split of its common stock to shareholders of
record as of September 15, 1995; which shares were issued on September 28, 1995.
As a result, all shares and related references have been restated for all prior
periods and transactions.

NOTE 2 - ACCOUNTING CHANGE:

During the second quarter of 1996, the Company adopted a new method of
accounting for pre-contract costs. Pre-contract costs represent amounts
applicable to products and technologies which represent adaptations of existing
capabilities to the particular requirements of the Company's customers. These
costs were previously deferred and recovered over the revenue streams from these
customers. The Company will now expense these costs as they are incurred. Due to
current industry trends and anticipated accounting changes, the new policy is
considered preferable to the previous policy. Both policies are currently in
accordance with generally accepted accounting principles.

The $3.2 million cumulative effect of the change on prior years (after reduction
for income taxes of $2.2 million) is included in operations of the nine months
ended September 30, 1996. The effect of the change on the three months ended
September 30, 1996 was to decrease net earnings by approximately $605,000 ($.06
per share); the effect of the change on the nine months ended September 30, 1996
was to decrease earnings before cumulative effect of a change in accounting
principle $2.4 million ($.27 per share) and net earnings by $5.6 million ($.63
per share). The pro forma amounts reflect the effect of retroactive application
on pre-contract costs, net of amortization, and the related income tax benefits.

The effect of the change on the first quarter of 1996 was as follows:

<TABLE>
<CAPTION>
                                                                                    Three Months
                                                                                       Ended
                                                                                   March 31, 1996
                                                                                   --------------
<S>                                                                                <C>          
Net income as originally reported                                                  $     685,179
Effect of change in accounting for pre-contract costs                                   (563,247)
                                                                                   -------------
Income before cumulative effect of a change in accounting principle                      121,932
Cumulative effect on prior years (to December 31, 1995) of
     changing accounting for pre-contract costs                                       (3,239,948)
                                                                                   -------------
Net loss as restated                                                               ($  3,118,016)
                                                                                   =============

Per share amounts:
     Net income as originally reported                                             $         .08
     Effect of change in accounting for pre-contract costs                                  (.07)
                                                                                   -------------
     Income before cumulative effect of a change in accounting principle                     .01
     Cumulative effect on prior years (to December 31, 1995) of
         changing accounting for pre-contract costs                                         (.36)
                                                                                   -------------
     Net loss as restated                                                          ($        .35)
                                                                                   =============
</TABLE>


                                       6
<PAGE>   8
                                  SIMULA, INC.

Pro forma amounts assuming the change in accounting had been applied
retroactively are as follows:

<TABLE>
<CAPTION>
                                               Three Months           Nine Months
                                                  Ended                  Ended
                                              September 30,          September 30,
                                                   1995                   1995
                                              -------------          -------------

<S>                                              <C>                 <C>        
Net earnings (loss)                              ($213,076)          $   903,325
                                                 =========           ===========
Net earnings (loss) per share                    ($    .02)          $       .11
                                                 =========           ===========
</TABLE>


NOTE 3 - CONTRACT RECEIVABLES:

Amounts receivable from the United States Government or receivable under United
States Government related subcontracts are generally billed in the following
month or when the contract and all options thereunder are completed. Amounts due
on other commercial contracts are generally billed as shipments are made.
Intercompany receivables have been eliminated.


NOTE 4 - INVENTORIES:

At September 30, 1996 and December 31, 1995, inventories consisted of the
following:

<TABLE>
<CAPTION>
                                            September 30, 1996    December 31, 1995
                                            -------------------   -----------------

<S>                                            <C>                    <C>       
Raw materials                                  $ 6,099,390            $3,319,958
Work in process                                  9,457,861             4,711,256
Finished goods                                     818,339                72,980
                                               -----------            ----------
   Total inventories                           $16,375,590            $8,104,194
                                               ===========            ==========
</TABLE>

NOTE 5 - REVOLVING LINE OF CREDIT:

On October 20, 1995, the Company executed a loan agreement with Wells Fargo Bank
(formerly First Interstate Bank, N.A.) to provide up to $15,000,000 of credit.
Ten million dollars of the facility is available under a revolving credit
arrangement to finance working capital requirements and five million dollars is
available under a five-year amortizing term loan for the financing of U.S. based
equipment. The outstanding balances of the revolving credit facility and
equipment facility at September 30, 1996 were $2.4 million and $3.5 million,
respectively. The Company has entered into a commitment with Wells Fargo Bank to
increase the revolving line of credit to $20 million and extend its maturity to
June 1998. The terms of the commitment are substantially the same as the current
credit agreement and are subject to the completion of the applicable loan
documents.

NOTE 6 - DEBT:

In September 1996, the Company issued $14.3 million of Series C 10% Senior
Subordinated Convertible Notes (the "10% Notes") in a private placement to
accredited investors. The 10% Notes bear interest at 10% payable semi-annually
and are due in September 1999. The notes are convertible into common stock of
the Company at 103% of the average closing price of the Company's common stock
as quoted on the New York Stock Exchange for the 10 consecutive trading days
immediately preceding notice by the individual holder fixing the conversion
price. As of September 30, 1996, these bonds were convertible into approximately
850,000 shares of the Company's common stock. The Company has the right to call
the 10% Notes at par plus accrued interest through the date of redemption any
time after June 15, 1997 and earlier under certain circumstances.


                                       7
<PAGE>   9
                                   SIMULA, INC


During the third quarter, the Company borrowed $1.7 million from Stanley
Desjardins, its Chairman and a principle shareholder. These loans were on
arms-length terms and conditions, unsecured and were repaid prior to September
30, 1996. Approximately $20,000 was paid to Mr. Desjardins by the Company during
the third quarter for points and interest.

NOTE 7 - INCOME TAXES:

The tax provision for the three and nine month periods ended September 30, 1996
is proportionate to the federal and state combined rate of approximately 40%.
The income tax provision for the three and nine month periods ended September
30, 1995 is disproportionate due to the realization of the historic tax
attributes of an acquired subsidiary.

The income tax receivable at September 30, 1996 of $4.1 million primarily
represents estimated refunds of income taxes paid in 1992 through 1995 and
amounts which will be available to offset future taxable income. This receivable
results from the Company changing its method of accounting for pre-contract
costs for income tax purposes (Note 2) and operating losses incurred in 1996.
The Company has filed its 1995 federal and state income tax returns and the
resulting application for net operating loss carrybacks. In addition, the
Company is currently in the process of amending prior income tax returns to
reflect the change in accounting for pre-contract costs. Approximately $3.3
million of the receivable balance represents estimated refunds of income taxes
previously paid.


NOTE 8 - SHAREHOLDERS' EQUITY:

During the second quarter of 1996, the Company retired 82,500 shares of treasury
stock which had been acquired for a cost of $279,838.

Weighted average shares used to compute per share amounts for the three and nine
month periods ended September 30, 1996 do not include common stock equivalents
because their effect would be anti-dilutive. In addition, fully diluted earnings
per share reflecting the effect of the 10% Notes is not presented because the
effect would also be anti-dilutive.


                                       8
<PAGE>   10


                                  SIMULA, INC.

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

GENERAL:

Simula, Inc. and subsidiaries (collectively, the "Company") designs and
manufactures occupant safety systems and devices engineered to safeguard human
life in a wide range of air, ground, and sea transportation vehicles. Utilizing
substantial proprietary technology in energy-absorbing seating, inflatable
restraints, and composite materials which the Company has developed over many
years, the Company focuses on reducing injury and increasing survivability in
vehicle crashes.

Utilizing its proprietary safety technology, customer relationships, and
manufacturing capacity and expertise, developed on its own and enhanced through
acquisitions, the Company has developed and is introducing crashworthy seating
systems for commercial airliners, a side-impact inflatable restraint system for
automobiles, a bulkhead airbag system for commercial airliners, and two cockpit
inflatable restraint systems for military aircraft. Through acquisitions, the
Company has become the largest North American-based supplier of seating systems
for rail and other mass transit vehicles and a prominent supplier of repair and
refurbishing services for commercial airliner seating, including the
installation of entertainment and communication systems.

The Company is a holding company for wholly owned subsidiaries, principally
including Simula Government Products, Inc., an entity conducting the Company's
primary government business, and Intaero, Inc., an entity conducting the
Company's primary commercial businesses through its operating subsidiaries:
Airline Interiors, Inc., Coach & Car Equipment Corporation and Artcraft
Industries Corp.

The Company derives a substantial portion of its revenue from contracts that are
accounted for under the percentage of completion method of accounting. Under
this method, revenue is recorded as production progresses so that revenue less
costs incurred to date yield the percentage of gross margin estimated for each
contract. Overall gross margin percentages can increase or decrease based upon
changes in estimated gross margin percentages over the lives of individual
contracts.

In order to prepare for the production of the 16g commercial airliner seat ("16g
Seat") in commercial quantities and the commercial introduction of the
automotive Inflatable Tubular Structure ("ITS") and airliner bulkhead airbag,
the Company has incurred significant pre-contract costs, which have been charged
to expense in 1996. In prior years, such costs were capitalized. (See below and
Note 2 of the Notes to Interim Consolidated Financial Statements). In order to
support the introduction and production of these new products, the Company has
incurred plant start-up costs and has also significantly increased expenses
applicable to its corporate and sales infrastructure, which expenses were
necessary to develop markets and support the production of these products that
are anticipated to produce revenue in late 1996 and 1997. The Company's
contracts for the ITS and airliner bulkhead airbag provide for deliveries of
commercial quantities in 1997. Because of the limited revenues from these
products in 1996, the costs associated with these products are expected to
continue to negatively impact 1996 results. In addition, the Company has
accelerated research and development expenses applicable to potential new
products related to these technologies. The incurrence of all of these costs
resulted in a loss before cumulative effect of the change in accounting
principle of $2.3 million for the nine months ended September 30, 1996.

RESULTS OF OPERATIONS

During the second quarter of 1996, the Company adopted a new method of
accounting for pre-contract costs as more fully described in Note 2 of the Notes
to Interim Consolidated Financial Statements. Beginning in 1996, the Company now
expenses these pre-contract costs as incurred rather than deferring these costs
to be amortized over the revenue streams from the Company's customers. This
change resulted in a cumulative catch-up adjustment for the effect of costs
capitalized as of December 31, 1995. The effect of the change on the three
months ended September 30, 1996 was to increase cost of revenue by $1.0 million,
resulting in a reduction in net earnings before the cumulative effect of a
change in accounting principle of approximately $605,000 ($.06 per share) net of
the related income tax benefit. The effect of the change on the nine months
ended September 30, 1996 was to increase cost of revenue by $4.1 million,
resulting in a reduction in net earnings before cumulative effect of a change in
accounting principle of $2.4


                                       9
<PAGE>   11
                                  SIMULA, INC.

million ($.27 per share) net of the related income tax benefit. In addition, net
income for the nine months ended September 30, 1996 was reduced by $3.2 million
($.36 per share) for the cumulative effect on prior years (to December 31, 1995)
of changing accounting for pre-contract costs. Assuming the change in accounting
had been applied retroactively to the three and nine months ended September 30,
1995, cost of revenue would have increased $2.3 million to $11.7 million and
$3.0 million to $31.0 million, respectively and gross margins would have
decreased from 37% to 22 % and 36% to 29%, respectively.

Three and Nine Months Ended September 30, 1996 Compared to 1995

Revenue for the three months ended September 30, 1996 decreased 13% to $12.9
million from $14.9 million for the comparable period in 1995. This decrease was
primarily due to reduced revenue from the sale and licensing of technology and a
reduction in revenue from the Company's Intaero division as Coach & Car was
repositioned to begin high volume manufacturing of the 16g Seat. Revenues for 
the nine months ended September 30, 1996 increased 13% to $49.2 million from
$43.7 million. This increase was primarily attributable to increased contract
activity at Simula Government Products principally resulting from an armor
contract completed during the second quarter of 1996 offset by the decreases
noted for the third quarter.

Gross margins for the three months ended September 30, 1996 decreased 61% to
$2.1 million from $5.5 million for the comparable period in 1995. As a percent
of sales, gross margin decreased to 17% from 37% for the comparable period in
1995. Gross margins for the nine months ended September 30, 1996 decreased 32%
to $10.7 million from $15.7 million for the comparable period in 1995. As a
percent of sales, gross margin decreased to 22% from 36% for the comparable
period in 1995. The decrease in gross margins is primarily due to: 1) the
expensing of pre-contract costs; 2) reduced throughput and therefore reduced
revenue at Coach & Car as its manufacturing process was repositioned to begin
high volume manufacturing of the 16g Seat; and 3) a reduction in technology
sales which totaled $1.6 million in the 1995 period. As noted above, cost of
revenue for the three and nine month periods ended September 30, 1996 includes
$1.0 million and $4.1 million for pre-contract costs. These costs primarily
relate to adaptations of the existing capabilities of the ITS and bulkhead
airbag products which are not yet in production and the 16g Seat which is in the
initial phase of production. The inclusion of these costs is offset by increased
margins attributable to the increased revenue at Simula Government Products.
Excluding the effect of expensing pre-contract costs, the gross margin
percentage for the three and nine months ended September 30, 1996 would have
been 24% and 30%, respectively. The lower gross margin percentage is primarily
attributable to lower individual gross margin percentages from the mix of
contracts in process or completed during the period at Artcraft, Coach & Car and
Simula Government Products and reduced technology sales.

Administrative expenses for the three months ended September 30, 1996 increased
18% to $4.9 million from $4.2 million for the comparable period in 1995.
Administrative expenses for the nine months ended September 30, 1996 increased
20% to $13.0 million from $10.8 million for the comparable period in 1996. These
increases are primarily attributable to the continued expansion of the corporate
and sales infrastructure related to the commercial introduction of the Company's
technologies, principally the 16g Seat. Administrative expenses also include
research and development costs related to the development of electronic sensors
for potential applications in aircraft and automobiles. In addition, general
administrative expenses have increased as a result of increased activity.

Operating (loss) income for the three months ended September 30, 1996 decreased
$4.0 million to a loss of $2.8 million. Operating (loss) income for the nine
months ended September 30, 1996 decreased $7.1 million to a loss of $2.3
million. The reduction in operating income resulted primarily from the reduction
in gross margins and increased administrative expenses noted above. Excluding
the effect of expensing pre-contract costs during the three months ended
September 30, 1996, the operating loss would have been $1.8 million. This loss
is primarily the result of the expansion of the corporate and sales
infrastructure to support the 16g Seat which has not yet generated significant
revenues and increased research and development.

Interest expense for the three months ended September 30, 1996 increased 81% to
approximately $685,000 from $379,000 for the comparable period in 1995. Interest
expense for the nine months ended September 30, 1996 increased 9% to $1.5
million from $1.3 million for the comparable period in 1995. These increases are
due to increased borrowings on the Company's credit facilities to fund its
growth in working capital and fixed assets. In


                                       10
<PAGE>   12
                                  SIMULA, INC.


addition, approximately $8.1 million of debt was repaid in the second quarter of
1995 with a portion of the proceeds from the Company's 1995 public offering.

The effective income tax rate for the three and nine months ended September 30,
1996 approximates 40%. During 1995, the Company recognized the effects of
historic tax attributes of an acquired subsidiary resulting in a net tax benefit
of 27% for three months ended September 30, 1995 and a disproportionate tax
provision of 23% for the nine months ended September 30, 1996.

LIQUIDITY AND CAPITAL RESOURCES

The Company's liquidity is greatly impacted by the nature of the billing
provisions under its contracts. Generally, in the early period of contracts,
cash expenditures and accrued profits are greater than allowed billings while
contract completion results in billing previously unbilled costs and profits.
Contract receivables, net of advances on contracts, increased $2.5 million for
the nine months ended September 30, 1996, principally due to the reduction of
advances on contracts completed and in progress at Coach & Car and Artcraft.

Operating activities required the use of $11.2 million of cash during the nine
months ended September 30, 1996, compared to the use of $10.6 million of cash
during the same period in 1995. This resulted primarily from the working capital
required for the reduction in advances on contracts noted above, and the funding
of the $7.7 million investment in inventories primarily at Airline Interiors and
Simula Government Products. The increase in inventories at Airline Interiors
primarily represents the buildup necessary to support anticipated future
deliveries of the 16g seat. The increase in inventories at Simula Government
Products represents inventory necessary to support certain programs which
require the buildup of components necessary to support rapid deliveries of
various configurations of seats. In addition, both Airline Interiors and Simula
Government Products have purchased inventory in larger quantities to reduce per
unit costs.

Investing activities required the use of $6.6 million of cash during the nine
months ended September 30, 1996 primarily for the purchase of manufacturing
equipment for the ITS and 16g Seat and computer and test equipment at Simula
Government Products.

Financing activities provided $18.3 million of cash during the nine months ended
September 30, 1996, of which $2.4 million resulted from borrowings on the
revolving credit facility primarily for working capital needs and $2.7 million
resulted from borrowings on the equipment credit facility for the financing of
fixed assets. In September 1996, the Company issued $14.3 million of Series C
10% Senior Subordinated Convertible Notes (the "10% Notes") in a private
placement to accredited investors. The 10% Notes bear interest at 10% payable
semi-annually and are due in September 1999. The notes are convertible into
common stock of the Company at 103% of the average closing price of the
Company's common stock as quoted on the New York Stock Exchange for the 10
consecutive trading days immediately preceding notice by the individual holder
fixing the conversion price. As of September 30, 1996, these bonds were
convertible into approximately 850,000 shares of the Company's common stock. The
Company has the right to call the 10% Notes at par plus accrued interest through
the date of redemption any time after June 15, 1997 and earlier under certain
circumstances.

On October 20, 1995, the Company executed a loan agreement with Wells Fargo Bank
(formerly First Interstate Bank, N.A.) to provide up to $15,000,000 of credit.
Ten million dollars of the facility is available under a revolving credit
arrangement to finance working capital requirements and five million dollars is
available under a five-year amortizing term loan for the financing of U.S. based
equipment. The outstanding balances of the revolving credit facility and
equipment facility at September 30, 1996 were $2.4 million and $3.5 million,
respectively. The Company has entered into a commitment with Wells Fargo Bank to
increase the revolving line of credit to $20 million and extend its maturity to
June 1998. The terms of the commitment are substantially the same as the current
credit agreement and are subject to the completion of the applicable loan
documents.

Included in current portion of long-term debt is a mortgage of $2.6 million on
one of the Company's facilities. The Company is involved in negotiations with
various lenders to refinance the mortgage and believes it will be able to
refinance the mortgage on a long-term basis prior to its maturity in March of
1997.


                                       11
<PAGE>   13
                                  SIMULA, INC.


As of September 30, 1996 and November 10, 1996, the Company has sufficient
resources through its debt financing, cash flow from operations and its bank
credit facilities to meet its current operating requirements. However, to
address the anticipated markets for its new technologies and products, the
Company will look to obtain additional capital. The raising of this additional
capital will be primarily dependent upon prevailing market conditions and the
demand for the Company's technologies and products. In relation to this, the
Company filed a registration statement on October 4, 1996 for 1,200,000 shares
of Convertible Preferred Stock. The terms, conditions, preferences and pricing
of the Convertible Preferred Stock have not been set. This filing was made to
enable the Company to more efficiently and timely pursue public capital sources
should the market become favorable. The proceeds to be raised will be used to
establish new and expand existing manufacturing facilities, primarily for the
manufacture of aircraft and rail seating systems and components related to the
Company's automobile inflatable restraint systems, working capital requirements
attendant to growth in markets and revenues and other general corporate
purposes, including potential future acquisitions.

INFLATION

The Company does not believe that it is significantly impacted by inflation.


RESEARCH AND DEVELOPMENT

The Company's research and development occurs primarily under fixed-price,
government-funded contracts as well as Company-sponsored efforts. The revenue
received under government-funded contracts is recorded under the percentage of
completion method of accounting, and the costs of independent research and
development efforts are expensed as incurred.

Historically, research and development efforts have fluctuated based upon
available government-funded contracts. The Company anticipates that future
fluctuations may also occur as a result of efforts to expand its inflatable
restraint, commercial airliner seating, and rail seating technologies.

SEASONALITY

The Company's operations and financial results are affected by the seasonal
variations in deliveries by suppliers. Historically, the Company has experienced
its highest level of deliveries of materials in the fourth quarter and its
lowest level of deliveries in the first quarter. Accordingly, the Company has
historically recorded its highest revenue in the fourth quarter and lower
revenue in the first quarter.


FORWARD LOOKING INFORMATION AND RISKS OF THE BUSINESS

The Company expects that during the remainder of fiscal 1996, it will devote
significant resources to complete development and roll-out of new products and
technologies, and to expand its manufacturing capability for such products,
including the ITS, 16g Seat, Cockpit Airbag System, Bulkhead Airbag System and
Inflatable Body and Head Restraint System. The Company expects that in late 1996
and in 1997, it will begin to realize revenues from the introduction of these
products. The other core businesses of the Company are expected to remain at
current revenue levels.

The Company's operating results are affected by a wide variety of factors which
could adversely impact its revenues and profitability, many of which are beyond
the control of the Company. The factors include the Company's ability to design
and introduce new products on a timely basis; market acceptance and demand of
both the Company's and its customers' products; the level of orders which are
received and can be shipped in a quarter; availability and utilization of
manufacturing capacity; the availability and cost of raw material, equipment,
and other supplies; the cyclical nature of the airline, rail and automobile
industries and other markets addressed by the Company's products; the level and
makeup of military expenditures; technological changes; competition and
competitive pressures on pricing; and economic conditions in the United States
and worldwide markets served by the Company.


                                       12
<PAGE>   14
                                  SIMULA, INC.

PART II - OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

The Company filed a registration statement on October 4, 1996 for 1,200,000
shares of Convertible Preferred Stock. The terms, conditions, preferences and
pricing of the Convertible Preferred Stock have not been set. This filing was
made to enable the Company to more efficiently and timely pursue public capital
sources should the market become favorable. The proceeds to be raised will be
used to establish new and expand existing manufacturing facilities, primarily
for the manufacture of aircraft and rail seating systems and components related
to the Company's automobile inflatable restraint systems, working capital
requirements attendant to growth in markets and revenues and other general
corporate purposes, including potential future acquisitions.

ITEM 6.  EXHIBITS.

The following Exhibits are included pursuant to Item 601 of Regulation S-K.

<TABLE>
<CAPTION>
  NO.                                               DESCRIPTION                                            REFERENCE
  ---                                               -----------                                            ---------

<S>        <C>                                                                                               <C> 
   3.1     Articles of Incorporation of Simula, Inc., as amended and restated..........................      (14)
   3.2     Bylaws of Simula, Inc., as amended and restated.............................................       (1)
   4.2     Indenture dated December 17, 1993 (including cross-reference sheet to Trust Indenture Act),
              as amended...............................................................................       (4)
   4.5     Amended and Restated Supplemental Indenture No. 2 dated September 12, 1996, entered into
              in connection with the Registrant's issuance of Series C 10% Senior Subordinated
              Convertible Notes........................................................................      (14)
  10.4     Contract dated December 16, 1991, between Registrant and the United States Army Aviation
              Systems Command with respect to the IBAHRS project.......................................       (1)
  10.8     Employment Agreement between Registrant and Stanley P. Desjardins...........................       (1)
  10.9     Employment Agreement between Registrant and Donald W. Townsend..............................       (1)
  10.11    1992 Stock Option Plan......................................................................       (1)
  10.12    1992 Restricted Stock Plan..................................................................       (1)
  10.15    Asset Purchase Agreement dated August 2, 1993 between Simula, Inc. and
           Airline Interiors, Inc. ....................................................................       (3)
  10.16    Asset Purchase Agreement dated June 14, 1994, among Simula, Inc., CCEC Acquisition
             Corp. and Coach and Car Equipment Corporation.............................................       (5)
  10.17    Stock Purchase Agreement between Simula, Inc. and SouthTech, Inc. and shareholders dated
              July 1, 1994.............................................................................       (7)
  10.18    Asset Purchase Agreement dated September 30, 1994, among Simula, Inc., Artcraft
              Acquisition Corp., and Artcraft Industries Corp..........................................       (6)
  10.21    1994 Stock Option Plan......................................................................       (7)
  10.22    Agreements dated January 27, 1995 with Autoliv AB, including license agreement, frame
              supply agreement and joint development agreement.........................................       (8)
  10.23    Agreement with Jetstream Aircraft Limited...................................................       (8)
  10.24    Loan Agreement with First Interstate Bank, N.A. dated October 20, 1995.....................        (9)
  10.25    Asset Purchase Agreement dated November 1, 1995, between Comfab, Inc. and Stanley P.
              Desjardins, d/b/a Desjardins Engineering; Services Agreement dated November 1, 1995,
              between Simula, Inc. and Comfab, Inc.; Promissory Note of Stanley P. Desjardins, d/b/a
              Desjardins Engineering, dated November 1, 1995, for the purchase price of Comfab, Inc. .       (10)
  10.26    Simula, Inc. Employee Stock Purchase Plan...................................................      (11)
  10.27    Promissory Note representing $650,000 loan from Stanley P. Desjardins dated August 12,
              1996.....................................................................................      (14)
  10.28    Promissory Note representing $1,000,000 loan from Stanley P. Desjardins dated August 14,
              1996.....................................................................................      (14)
 *11.      Earnings Per Share..........................................................................
  18.      Preference Letter re change in accounting principles........................................      (13)
  24.      Powers of Attorney -- Directors.............................................................      (10)
 *27.      Financial Data Schedule ....................................................................
</TABLE>


                                       13
<PAGE>   15
                                  SIMULA, INC.



----------

* Filed herewith.


     (1)  Filed with Registration Statement on Form S-18, No. 33-46152-LA, under
          the Securities Act of 1933, effective April 13, 1992.

     (2)  Filed with Form 10-KSB for the year ended December 31, 1992.

     (3)  Filed with current Report on Form 8-K, dated August 2, 1993.

     (4)  Filed with Registration Statement on Form SB-2, No. 33-61028 under the
          Securities Act of 1933, effective December 10, 1993.

     (5)  Filed with current Report on Form 8-K, dated June 14, 1994.

     (6)  Filed with current Report on Form 8-K, dated September 30, 1994.

     (7)  Filed with Registration Statement on Form SB-2, No. 33-87582, under
          the Securities Act of 1933, effective December 28, 1994.

     (8)  Filed with Registration Statement on Form S-1, No. 33-89186, under the
          Securities Act of 1933, effective March 28, 1995, as amended by
          Post-Effective Amendment No. 1, effective March 31, 1995.

     (9)  Filed with Report on Form 10-Q for the quarter ended September 30,
          1995.

     (10) Filed with Report on Form 10-K for the year ended December 31, 1995.

     (11) Filed with Definitive Proxy on May 14, 1996, for the Company's Annual
          Meeting of Shareholders held on June 20, 1996.

     (12) Filed with Report on Form 10-Q for the quarter ended June 30, 1996.

     (13) Filed with Report on Form 10-Q/A dated October 3, 1996, amending
          Report on Form 10-Q for the quarter ended June 30, 1996.

     (14) Filed with Registration Statement on Form S-3, File Number not yet
          assigned, filed on October 4, 1996.


                                       14
<PAGE>   16
                                  SIMULA, INC.

                                    SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-Q for the quarter ended
September 30, 1996 to be signed on its behalf by the undersigned thereunto duly
authorized.


                                              SIMULA, INC.



DATE:     November 13, 1996                    /s/  Donald W. Townsend
         --------------------               --------------------------
                                              DONALD W. TOWNSEND
                                              President
                                              Chief Operating Officer


                                               /s/  Sean K. Nolen
                                             -------------------------
                                              SEAN K. NOLEN
                                              Chief Financial Officer


                                       15