

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

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

     (Mark One)

[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934

For the fiscal year ended December 31, 2000

                                       OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

                         Commission file number: 0-1298

                        ADVANCED TECHNICAL PRODUCTS, INC.
             (Exact name of registrant as specified in its charter)

                  Delaware                                   11-1581582
        (State or other jurisdiction                      (I.R.S. Employer
      of incorporation or organization)                  Identification No.)

                         200 Mansell Ct. East, Suite 505
                             Roswell, Georgia 30076
               (Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (770) 993-0291

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

        Title of Each Class            Name of Each Exchange on Which Registered
        -------------------            -----------------------------------------
   Common Stock, $0.01 par value            Nasdaq / National Market System

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

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

     [X]

     The aggregate market value of the voting stock held by non-affiliates of
the registrant on March 28, 2001 was $26,486,501 (3,817,874 shares at $6.9375
per share, the closing price of the registrant's common stock on the Nasdaq
National Market on March 30, 2001). As of that date, 5,450,473 shares of the
Company's Common Stock were outstanding.

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

<PAGE>

                                     PART I

ITEM 1.                             BUSINESS

General

     Advanced Technical Products, Inc. ("ATP" or the "Company") is a Delaware
corporation that manufactures a variety of products in the following principal
business segments: (i) Aerospace and Defense, (ii) Commercial Composites and
(iii) Other Products. Such products are manufactured through four business
units, Marion Composites, Intellitec, Lincoln Composites and Lunn Industries.
The Aerospace and Defense segment designs, develops and manufactures advanced
composite material products, including radomes, aircraft components, missile and
satellite composite structures, engine components, rocket motor cases, pressure
vessels, relocatable shelters, missile launch tubes, torque shafts and fuel
tanks, as well as a wide range of integrated defense systems including
electro-optical systems, chemical and biological detection systems, ordnance
delivery systems and light-weight camouflage systems. The Commercial Composites
segment produces natural gas vehicle ("NGV") fuel tanks, products used in the
exploration and production of oil and gas and other composite-based commercial
products. The Other Products operating segment primarily consists of a
manufacturer of electrical power switching products for specialty vehicles
including recreational vehicles, motor homes, conversion vans, over-the-road
trucks and leisure boats. See Note 5 to the Consolidated Financial Statements of
the Company for a summary of selected financial data of each reportable business
segment. The Company also manufactures structural core materials through its
Alcore business unit which is treated as a discontinued operation for financial
reporting purposes.

     On October 31, 1997, TPG Holdings, Inc., a Delaware corporation ("TPG"),
merged with Lunn Industries, Inc., a Delaware corporation ("Lunn"), under the
name "Advanced Technical Products, Inc." Lunn was originally incorporated in New
York in 1948 and was reincorporated in Delaware in 1987. TPG was formed in 1995
to acquire the business and assets of three operating units of the Brunswick
Technical Group, which was completed on April 28, 1995.

Aerospace and Defense Segment

     Composite Based Products

     Radomes. One of ATP's principal products is high-performance radomes. A
radome is an aerodynamic and environmental cover made of composite materials
that shelters the antenna assembly of a radar set on an airplane, rocket or
missile. Management believes that ATP has approximately a 75% share of the
domestic high-performance radome market and is the sole supplier of radomes for
aircraft such as the EA6B, AV-8B, B-1, B-1B, C-5B, C-17, C-130, F-4, F-5, F-14,
F-15, F-16 and the F/A-18. Additionally, ATP owns ceramic radome manufacturing
technology which enables it to manufacture high temperature, high performance
radomes for interceptor missile applications. ATP has manufactured Patriot
Missile radomes since 1971, and management believes that ATP has been the sole
supplier for the past 15 years.

     Sales of radomes for each of 2000, 1999 and 1998 constituted 9.4%, 10.1%
and 9.0%, respectively, of the total consolidated revenues of ATP.

     Aircraft Components. ATP manufactures composite materials and products for
aerospace and defense applications and is a leading manufacturer of advanced
composite aircraft structures. ATP currently fabricates flap panels, winglets
and landing gear doors for the C-17. Management believes the


                                       2
<PAGE>

C-17 is a high-priority program for the U.S. Air Force and that the production
of these C-17 components will provide a stable stream of revenue for ATP for the
foreseeable future.

     ATP also manufactures composite-based canopies, fuel tanks, wing and floor
panels, fairings and other aircraft components. ATP has participated in
developmental projects that include radar absorbing materials, radar absorbing
structures and frequency selective surfaces for low observable applications.

     ATP's program to supply flap track fairings to The Aerostructures
Corporation is currently in production, and 106 shipsets have been delivered as
of the end of 2000. These parts are installed on the Airbus A330 and A340
aircraft. This "life of the program" contract is anticipated to cover
approximately 500 aircraft.

     In December 1997, ATP entered into a long-term production alliance with
General Electric Aircraft Engines pursuant to which ATP is manufacturing a
composite inlet device for the GE F414-400 turbofan engine to be used in the
U.S. Navy's newest fighter, the F/A-18E/F "Super Hornet." In June 1998, GE
placed an order with an estimated value of $65 million over five years as the
initial step in the GE-ATP alliance. ATP has been delivering product under the
order since late 1998.

     Sales of aircraft components for each of 2000, 1999 and 1998 constituted
24.3%, 22.0% and 18.6%, respectively, of the total consolidated revenues of ATP.

     Rocket Motor Cases. ATP manufactures a variety of rocket motor cases used
in solid propellant propulsion systems that are incorporated into strategic
(long-range) and tactical missile systems as well as orbiting commercial
satellites and deep-space penetration spacecraft. ATP manufactures rocket motor
cases for use in strategic missiles such as the D-5 Trident II, as well as for
tactical missile systems such as the PAC-3 Anti-Missile missile. ATP also
manufactures the ORBUS-21D rocket motor case, which is used in conjunction with
the space shuttle and other unmanned launch vehicles to place satellites into
Earth's orbit, and is also used on deep space missions.

     Pressure Vessels. ATP produces filament wound pressure vessels that are
used predominantly in aircraft, launch vehicles and space applications where
weight minimization is critical. These high-performance pressure vessels are
typically used as a storage container for pressurized helium, nitrogen, xenon
and other gases which are used in critical system applications, including
emergency power, crew capsule impact and flotation, maneuvering, environmental,
fuel feed and purge systems. ATP has been a leader in the integration of
filament winding technology in combination with metal liners that results in
vessels that meet or exceed structural requirements. A number of existing
pressure vessel configurations are currently qualified by prime contractors and
the military. This qualification reduces competition for follow-on orders and
provides a variety of products that can be offered for new applications with
minimal capital investment and production lead time.

     Fuel Tanks. External fuel tanks are used by the military to provide
aircraft with additional operating range. The military requires all-composite
external fuel tanks because they offer a significant weight advantage and
improved crash survivability, greater safety in a fire, and improved gunfire
protection. Management believes that ATP is currently the only qualified
producer of the tank liner for the 230-Gallon AH-64/UH-60 Fuel Tank, which is
used by the U.S. Army. ATP continues to deliver under contracts for the
production of the 480-gallon external fuel tanks for the F/A-18E/F. Deliveries
extend through 2001 under the current contract.

     Vehicle/Missile Structures. ATP's vehicle/missile structure product line
includes composite products used for various structural applications such as
launch vehicles, space, marine and aircraft applications. Products more recently
included in this product line are missile warheads, radar housings, missile


                                       3
<PAGE>

structures, aircraft and missile control surfaces and aircraft engine ducts.
These structures must be light weight and have excellent structural properties
in order to replace conventional metal products. These projects are usually
obtained from various aerospace and defense companies and government
laboratories that need to develop prototype hardware to demonstrate capabilities
of advanced composites.

     Tubular Products. ATP's tubular product line includes missile launch tubes
and torque shafts. The primary products in the launch tube line include the
Multiple Launch Rocket System (MLRS) and the launch canister for the submarine
based Tomahawk Missile. While management believes that the MLRS program is
important to the U.S. Army as an effective, low-cost weapon system, the Army has
a large inventory of these missiles, and the funding level for this program
remains low. Composites offer desirable properties for torque shafts for various
aerospace and defense applications and are presently being used in Boeing
Vertol's 234 helicopter.

     Resin Transfer Molding. Resin transfer molding (RTM) is the fabrication of
a composite component formed by pumping resin into a mold containing
reinforcement material. The rough product is then removed from the mold and
finished. While use of this manufacturing process is primarily driven by its
lower cost, recent advances in materials and equipment have helped to make the
process a viable choice for fabricating composite aircraft and military
structures. ATP supplies 192 parts on the Air Force Air Superiority Fighter, the
F-22, and management believes it is the only qualified non-prime supplier of RTM
components for the Navy's F/A-18E/F.

     In addition to serving as a supplier to the manufacturers of military
aircraft, ATP provides components for commercial aircraft and engine components,
producing over 15,000 jet and turbine engine components annually. ATP continues
to grow this manufacturing process and is expanding into diversified liquid
molding processes, such as Vacuum Assisted Resin Transfer Molding (VARTM), for a
wide variety of applications in support of its aerospace and defense customer
base.

     Metal Bonding. ATP supplies metal bonded products through its Lunn
Industries division. ATP possesses the technology and qualifications required by
The Boeing Company for Phosphoric Acid Anodizing (PAA) and structural bonding to
BAC 5555. This PAA capability allows ATP to service the commercial aircraft
market. Numerous other qualifications allow ATP to provide products and services
to the spaceflight, defense and industrial markets. ATP metal bonded products
can be found in the Boeing 777, 747, 757, 767 and 727 commercial aircraft as
well as numerous defense and satellite applications.

     Other Defense Systems

     Chemical and Biological Defense. ATP continues its role as an industry
leader in the Chemical Defense market. In 1999, ATP entered into a unique
Partnership Agreement with the U.S. Army's Soldier and Biological Chemical
Command (SBCCOM). All subsequent contracts awarded by SBCCOM to ATP will include
an individually designed and tailored Partnering Agreement geared toward
successful contract performance and continuous product and process improvement.
Management believes that this agreement is evidence of ATP's strong position in
this market and the confidence developed between the Company and its customer.

     ATP is a leader in the remote chemical detection sector, which management
expects to be a growth market for the next several years, based on the latest
U.S. defense budgets. ATP is currently performing under a contract to develop
the next generation remote sensor, the Joint Services Lightweight Standoff
Chemical Agent Detector (JSLSCAD). The JSLSCAD contract, awarded in 1997,
consists of a cost-plus development phase worth slightly over $30 million over
four years, plus options for production units potentially worth over $200
million.


                                       4
<PAGE>

     During 2000, the Company continued production on the Improved Chemical
Agent Monitor (ICAM), a monitoring system designed to detect surface
contamination on a wide variety of objects. Full-scale production of the ICAM is
expected to continue through 2002.

      ATP is also actively involved in the development and production of
collective protection systems. Collective protection systems provide a clean and
over-pressured environment for soldiers to conduct their missions. Management
believes that ATP's collective protection systems, such as the internally
developed Bio-Chem Filter Blower Unit (BFBU), are the collective protection
systems of choice for several of the next generation vehicle systems. ATP is the
producer of the M28 Deployable Medical Collective Protection Equipment (CPE).
This product assures a clean environment for field hospital units for both the
U.S. Army and U.S. Air Force. Production of the M28 CPE was completed during
2000. Management has identified further opportunities for ATP's collective
protection systems and plans to pursue these opportunities in 2001.

     With the need for lighter weight vehicles in the medium sized brigade that
the U.S. Army has announced it is seeking to better equip, ATP also has
developed the Chemical Agent Filter Unit (CAFU) which has been geared to meet
the needs of this new Army initiative.

     To support the need for an integrated battlespace, ATP was awarded the
production effort for the Multi-Purpose Integrated Chemical Agent Detector
(MICAD) as a subcontractor to Lockheed Martin. This system integrates the data
from a host of detectors and automatically assembles and communicates the
condition of the battlespace. Production began in late 1999 with deliveries
expected to continue through 2001.

     In 2000, the Company grew its defensive systems segment into the detection
of biological warfare agents. ATP was awarded a contract by the U.S. Army for
low rate initial production of the Joint Biological Point Detection System
(JBPDS). Management believes this system could play a major role in U.S.
national defense.

     Sales of chemical and biological defense systems and related products for
each of 2000, 1999 and 1998 constituted 22.1%, 21.7% and 11.6%, respectively, of
the total consolidated revenues of ATP.

     Shelters/Shelter Integration. ATP designs, develops and produces mobile
military shelters and has developed leading design and automated production
capabilities for honeycomb as well as foam and beam sandwich panel construction
relocatable shelters. Management believes that most of the shelters in the
inventory of the Department of Defense (DOD) were designed and produced by ATP
or its predecessors. The Army Standard Family (ASF) Shelter is a honeycomb
shelter uniquely produced by ATP. The Lightweight Mobile Shelter (LMS) is a
broadly used shelter type for the U.S. Army's High Mobility Multipurpose Wheeled
Vehicle (HMMWV).

     ATP currently produces the Light Medium Tactical Vehicle (LMTV) shop van
for Stewart & Stevenson. This foam and beam shelter is mounted on Stewart &
Stevenson's 2 1/2 ton truck currently being fielded by the U.S. Army.

     ATP has recently broadened its product line with production of the unique
Chemical Biological Protection System Shelter (CBPSS), initial award of Type III
& IV Cargo Bed Covers (CBC), and introduction of the patented Height Reducible
Electronic Enclosure (HREE). Designed for mounting on the U.S. Army's newest 2
1/2 ton truck, management believes that the HREE affords tremendous improvement
in warfighter mobility and logistics, a key thrust of U.S. Army modernization
plans. ATP also provides shelters to Motorola under long term agreements.


                                       5
<PAGE>

     Sales of shelters and shelter integration products for each of 2000, 1999
and 1998 constituted 6.3%, 6.5% and 18.6%, respectively, of the total
consolidated revenues of ATP.

     Ordnance. ATP has been the sole manufacturer of the Volcano launcher
system. Customers for this system include the U.S. Army and other defense prime
contractors. The Company's current focus is on support to fielded systems and
the development of alternative applications of this proven delivery system.

     Tactical Deception. ATP is a leading producer of tactical deception
products for the U.S. Armed Forces and other military customers and has
delivered approximately one million modules of U.S. military Lightweight
Camouflage Screen Systems (LCSS). In 2000, the Company continued production of
LCSS for the U.S. Army Communications Electronics Command. With new
opportunities identified, the production of LCSS could continue through mid-year
2001 and beyond.

Commercial Composites Segment

     Natural Gas Vehicle Fuel Tanks

     ATP believes it maintains the dominant market share in the delivery of
all-composite fuel tanks that contain compressed natural gas for use as a
vehicle fuel. In 2000, the Company delivered its 36,000th NGV tank. The demand
for NGVs in North America continues to be driven by the public's demand for
replacement of diesel buses and their pollution rich exhaust fumes, and federal
legislation which provides incentives or tax credits for the use of alternative
fueled vehicles. Management believes that increased emphasis on relying on more
environmentally-friendly energy sources and on reducing the country's dependence
on foreign oil imports and increasing fuel prices continue to associate national
security and economic benefits with greater use of domestic natural gas. Primary
customers include original equipment manufacturers (OEMs) that design and build
light duty sedans, transit buses, school buses and high fuel use fleet vehicles.
Other customers include vehicle up-fitters or modifiers who install natural gas
fueling and storage components to existing vehicles. ATP performs particularly
valuable custom design work to allow ease of tank installation and mounting
provisions. The Company believes that its background in aerospace projects
provides the foundation for the successful design, development and production of
fuel storage systems (versus tanks alone) that can contain natural gas or
hydrogen in a fashion that couples very high reliability with light weight.
Also, the international market continues to offer increased revenue potential.
In 2000, the Company delivered products for natural gas vehicles used throughout
North America. Products were also delivered to customers in Japan, Mexico,
Europe and some developing countries.

     Sales of NGV fuel tanks and related products for each of 2000, 1999 and
1998 constituted 13.0%, 9.7%, and 10.0%, respectively, of the total consolidated
revenues of ATP.

     Oil and Gas Exploration Products

     Current deepwater oil completion and production technology utilizes heavy
steel tubular systems that require expensive tensioning and buoyancy systems
whose designs are often governed by fatigue considerations. Composite marine
risers provide advantages over conventional steel risers because composite
materials are lighter weight, more fatigue and corrosion resistant, better
thermal insulators and can be designed for improved structural and mechanical
performance. Overall, production platform cost reductions are possible as a
result of the lower weight and greater compliance of composite risers, along
with improvements in system reliability. ATP has completed the development of a
composite rigid riser for use in deepwater oil production and is currently
exploring field testing opportunities for oilfield products including:
production risers, tubing risers, drill risers, choke & kill lines and auxiliary
lines.


                                       6
<PAGE>

     ATP applied the NGV all-composite tank technology to develop an accumulator
tank for the Production Riser Tensioning system on off-shore platforms. There
are as many as four accumulators per well, and the new platforms have in excess
of 25 wells per platform. The all-composite accumulator is lighter weight,
non-corrosive and competitively priced with all-steel accumulators. The ATP
accumulator meets ASME Code X and management believes that currently there is
not a qualified competitor for this product. These accumulators offer some
significant advantages for the platform, and, as a result, the related revenue
is expected to increase significantly over the next several years.

Other Products Segment

     The Company's specialty vehicle electronics group is engaged in the design
and manufacture of electronic products for the specialty vehicle market that are
primarily used to distribute and control electrical power throughout the
vehicle. This market includes recreational vehicles (RVs), conversion vans,
trucks, buses, boats and other vehicles. Currently, ATP sells approximately 250
different products, most of which have been introduced to meet a customer's
request to solve a particular problem.

     ATP's products of this segment fall into three main categories: battery
run-down protection and charging, power switching and control, and 120 volt AC
power management. Many of the battery run-down protection and charging products
are centered around ATP's patented disconnect relay. The power switching and
distribution products center on ATP's unique patented multiplex system. ATP's
patented 120 volt AC power management products are used in RVs to minimize the
overloading of circuit breakers. Management believes that all major motor home
OEM's and all but one of the major van converters currently utilize ATP's
electrical products.

     ATP is currently directing efforts at increasing its market penetration
into the truck, bus and marine industries and increasing sales to major vehicle
fleet operators. ATP has an agreement with Waltco Truck Equipment Co., one of
the world's largest manufacturers of lift gates, to be their exclusive source of
electronic and electrical components. The initial products include a unique
weatherproof "Super Switch", and a controller to prevent damage to the
electro-hydraulic pump motor caused by overuse of the lift gate. Also, ATP
supplies unique energy management systems to Fleetwood Enterprises and to
Winnebago Industries, the two largest manufacturers of motor homes. Management
believes that approximately half of all motor homes built are now installed with
ATP's energy management systems.

     The Company supplies its Programmable Multiplex Control (PMC) for
production buses to Marshall Bus in the United Kingdom. Prototype buses using
this system have been built in the U.S. and are currently being road tested. The
PMC, a new system that simplifies wiring in transportation and commuter buses
worldwide, is the world's first user programmable multiplex system intended for
use in vehicles. A patent on this system has been issued. The system is also
suitable for other specialty vehicles, such as emergency and maintenance
equipment.

     During 1999, the Company signed an exclusive agreement with Horton
Ambulance, a premier emergency vehicle builder, to supply electronics for all
Horton emergency vehicles. Production started in the beginning of 2000. The
Company also continued to make major inroads to the fleet market by supplying
its battery run-down protection for use on all new Federal Express trucks being
built.

Discontinued Operations

     On June 30, 2000, the Company adopted a formal plan to sell its Structural
Core Materials segment, which consists of the operations of the Alcore and
Alcore Brigantine S.A. subsidiaries. During March 2001, the Company announced
that it had entered into a letter of intent for the sale of certain assets of


                                       7
<PAGE>

Alcore and 100% of the stock of the Alcore Brigantine S.A. subsidiary (the
"Transaction"). Consummation of the Transaction is subject to, among other
things, satisfactory completion of due diligence by the purchaser, execution and
delivery of a definitive purchase agreement and certain third party approvals.
The Company anticipates the Transaction will be closed during the second quarter
of 2001.

Competition and Markets

     ATP competes with many manufacturers that, depending on the product
involved, range from large diversified enterprises to smaller companies
specializing in particular products. Management believes that factors that
affect ATP's competitive posture are the quality of products and services, the
ability to employ certain technologies and pricing strategies. ATP competes by
defining and understanding customer and market needs, using its technology base
to develop new product applications that meet those needs, communicating and
demonstrating the technical advantage of its products and building long-term
relationships with its customers.

     There are many companies that compete with ATP in the aerospace and defense
industry. While ATP's management believes that it has an approximate 75% share
of the domestic high-performance radome market and is a leading supplier of
radomes in the domestic and international markets, ATP competes with a number of
other companies in the production of composite based products used in the
aerospace and defense industries. Also, ATP believes it is a leader in the
design and production of chemical and biological detection equipment. While
ATP's market share varies with respect to its other aerospace and defense
products such as rocket motor cases, fuel tanks and pressure vessels, ATP
overall has only a minor share of the total aerospace and defense markets.

     Some of ATP's commercial products are highly specialized and face less
competition in their respective markets. ATP's management believes that ATP has
approximately 90% of the NGV all-composite fuel tank market and is a leading
supplier of battery run-down protection and the power switching and control
devices for the motor home and van conversion OEM markets. Additionally, while
there are numerous producers of standard drill pipe and casing and fiberglass
tubulars, management believes that ATP has a leading position in the application
of advanced composites in the oil and gas industry.

Marketing and Customers

     ATP markets its aerospace and defense products directly to its customers
through its sales force, active membership in various industry groups, and by
participation in industry trade shows. ATP's aerospace and defense products are
sold primarily to agencies of the United States government and to commercial
customers in the aerospace industry. In 2000, sales to the United States
government either directly or by subcontract constituted 69% of ATP's total
consolidated revenue. Major customers include The Boeing Company and Lockheed
Martin Corporation. Combined aerospace component sales to these customers, most
of which are included above as United States government sales by subcontract,
represented approximately 26% of ATP's total consolidated revenues during 2000.
ATP's aerospace and defense products are generally designed and developed to
customer specifications.

     ATP markets and sells NGV fuel tanks and specialty vehicle electronics
primarily to vehicle manufacturers. ATP sells a significant majority of its
specialty vehicle products to a few major customers, the loss of any of which
would have an adverse impact on ATP's specialty vehicle products group.


                                       8
<PAGE>

     In the commercial composites business, it is necessary to carry a
reasonable raw material and finished goods inventory to allow for a rapid
customer response. The average days sales outstanding of accounts receivable for
the commercial products run somewhat longer than for comparable aerospace and
defense products. Also, there is a greater risk of bad debt associated with
commercial products.

     The Company provides warranties on products for material and workmanship
based on standard industry practice. Though ATP has endeavored to design an
extremely safe and durable product, the NGV tank and production riser have a
potential for greater product liability than standard aerospace and defense
products. ATP believes that it has adequate product liability insurance to
offset these risks.

Patents

     ATP owns numerous patents and patent applications, some of which, together
with licenses under patents owned by others, are utilized in its operations.
While such patents and licenses are, in the aggregate, important to the
operation of ATP's business, no existing patent, license or other similar
intellectual property right is of such importance that its loss or termination
would, in the opinion of management, materially affect ATP's business.

Backlog

     ATP's total backlog of contracts as of December 31, 2000 was approximately
$559 million as compared to approximately $549 million as of December 31, 1999.
These year-end backlogs include options or unreleased orders of approximately
$403 million and $404 million for 2000 and 1999, respectively. The backlog
predominantly relates to the aerospace and defense segment.

Government Contracts

     Because the United States government is a primary customer, ATP's revenues
are directly affected by the government's budget process, and inadequate funding
of the operation and maintenance portion of the DOD budget or a reduction in the
budgeted amount for certain programs could have an adverse impact on the revenue
of ATP. All government contracts, and, in general, subcontracts thereunder are
subject to termination in whole or in part at the convenience of the United
States government as well as for default. Long-term government contracts and
related orders are subject to cancellation if appropriations for subsequent
performance periods become unavailable. However, with respect to most contracts
involving the military, ATP would be entitled to receive cancellation payments
upon cancellation of such contracts.

Raw Materials and Supplies

     Raw materials essential to the conduct of all of ATP's business segments
generally are available at competitive prices. To date, ATP has not experienced
significant difficulties in its ability to obtain raw materials and other
supplies needed in its manufacturing processes, nor does ATP expect such
difficulties to arise in the future. ATP ordinarily acquires components and
materials through purchase orders typically covering ATP's requirements for
periods averaging 90 to 120 days.

Research and Development

     Excluding costs reimbursed under federally funded research and development
contracts, ATP has spent $208,000, $417,000 and $558,000 for each of 2000, 1999
and 1998, respectively, on research and development. The research and
development expenses predominantly relate to the aerospace and defense segment.


                                       9
<PAGE>

Seasonality

     The United States government's fiscal year begins on October 1, and the
Company's experience indicates that contracts and options on contracts are
generally awarded just prior to its year end. The lead time to perform the
necessary design work, procure materials and begin production is generally
several months, and this can create a period of low production, revenue and
profits in the first half of each fiscal year of ATP. See "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations."

Foreign Operations

     Sales to customers outside the United States totaled approximately 11.0%,
8.4% and 10.6% of ATP's total revenues for each of 2000, 1999 and 1998,
respectively. See Note 5 to the Consolidated Financial Statements of the Company
for additional disclosure of geographical financial data.

Environmental Regulation

     ATP's operations are subject to numerous local, state and federal laws and
regulations concerning the containment and disposal of hazardous materials,
pursuant to which ATP has incurred compliance costs. Such costs to date have not
been material. As described in greater detail under "Item 3. Legal Proceedings",
ATP has received notice that its Lunn Industries operation has been identified
as a potentially responsible party for certain environmental cleanup expenses
associated with a municipal landfill in Babylon, New York. ATP at present cannot
predict with precision what exposure it may face in this matter, but, otherwise
does not presently anticipate the need for significant expenditures to ensure
continued compliance with current environmental protection laws. Regulations in
this area are subject to change and there can be no assurance that future laws
or regulations will not have a material adverse effect on ATP.

Employees

     At December 31, 2000, ATP had 1,215 employees. Approximately 40% of ATP's
employees are covered by four separate collective bargaining agreements with
various international and local unions. ATP's management considers employee
relations generally to be good and believes that the probability is remote that
renegotiating these contracts will have a material adverse effect on its
business.


                                       10
<PAGE>

ITEM 2. PROPERTIES

     ATP's principal executive offices are located in Roswell, Georgia. ATP
maintains various facilities nationwide and considers all of its facilities to
be in relatively good operating condition and adequate for their present uses.
ATP believes that it has sufficient capacity to meet its current and anticipated
manufacturing requirements. The following table sets forth ATP's principal
manufacturing plants:

                                                   Approximate      Leased
                                                     Square           or
                                                     Footage         Owned
                                                     -------         -----
     Marion Composites Division:
         Marion, Virginia........................   1,019,000        Owned

     Intellitec Division:
         Deland, Florida.........................     353,000        Owned

     Lincoln Composites Division:
         Lincoln, Nebraska.......................     226,000        Owned
         Lincoln, Nebraska.......................     126,000       Leased

     Lunn Industries Division:
         Glen Cove, New York.....................      93,000       Leased

     The manufacturing facilities of the Marion Composites Division and the Lunn
Industries Division are used exclusively in connection with ATP's aerospace and
defense segments. While predominantly used in connection with ATP's aerospace
and defense segments, the facilities of the Intellitec Division and the Lincoln
Composites Division are used to some extent in connection with ATP's commercial
segments.

     ATP pays approximately $613,000 in annual rental expense with respect to
its principal leased manufacturing facilities, of which approximately $295,000
relates to facilities in Lincoln, Nebraska, and $318,000 relates to facilities
in Glen Cove, New York.

     Leases covering ATP's leased facilities expire at varying dates generally
within the next 12 years. ATP anticipates no difficulty in either retaining
occupancy through lease renewals, month-to-month occupancy or purchases of
leased facilities, or replacing the leased facilities with equivalent
facilities.

     The above table excludes a lease of a manufacturing facility located in
Jessup, Maryland which is no longer being used by ATP in its operations. As of
December 31, 2000, the Company has subleased substantially all of the Jessup
facility. Management has estimated the amount of remaining lease obligation
costs in excess of anticipated future sublease income to be $334,000 at December
31, 2000, and a liability of the same amount is included as an accrued expense
on the Company's Consolidated Balance Sheet at December 31, 2000.

ITEM 3. LEGAL PROCEEDINGS

      On October 7, 1999, the New York Office of the Attorney General, on behalf
of the New York State Department of Environmental Conservation ("NYSDEC"), sent
a letter to the Company, claiming that Lunn is a potentially responsible party
("PRP") with respect to contamination at the Babylon Landfill in Babylon, New
York. NYSDEC alleges that Lunn sent waste to the Babylon Landfill and that Lunn
is


                                       11
<PAGE>

jointly and severally liable under the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") for NYSDEC's response costs in
addition to interest, enforcement and future costs. According to NYSDEC, there
are currently 13 PRPs identified for the Babylon Landfill. NYSDEC documents seem
to indicate that Lunn did transmit waste to the Babylon Landfill, although it is
currently unclear to what extent Lunn contributed to contamination of the
landfill. As a PRP, the Company may be required to pay a portion of the costs of
evaluation and cleanup of this site. Lawsuits and claims involving additional
environmental matters may arise from time to time. The New York Attorney
General's investigation of the inactive CERCLA site in Babylon, New York is in a
preliminary stage, and as a result, management has based its assessment of
potential liability and remediation costs on currently available facts, the
number of PRPs identified, documentation available, currently anticipated and
reasonably identifiable remediation costs, existing technology, presently
enacted laws and regulations and other factors. While the Company may have
rights of contribution or reimbursement under insurance policies, such issues
are not factors in management's estimation of liability. Based on the foregoing
factors, management believes that it is unlikely that the identified matter at
the inactive Babylon, New York site will have a material adverse effect on the
Company's consolidated financial position, results of operations or cash flows.
Accordingly, the Company cannot presently determine the extent of its liability,
if any. The Company has not recorded any liability for the contingency as of
December 31, 2000.

     During January 2000, the Company learned of possible accounting and
financial reporting irregularities at its subsidiary, Alcore, when certain
financial records were seized in connection with a search warrant issued by the
United States District Court - District of Maryland as part of a governmental
investigation. Additionally, the Company has been notified of an investigation
by the United States Securities and Exchange Commission regarding these matters.
The Company and management are cooperating fully with these investigations. The
outcome of these investigations are uncertain at this time.

      The Company and certain of its Officers and Directors have been named in a
number of lawsuits filed during July 2000 in the United States District Court
for the Northern District of Georgia. During January 2001, the lawsuits were
consolidated and an amended complaint was filed. The lawsuit asserts securities
fraud claims based on, among other things, alleged misstatements and omissions
concerning the Company's 1998 and 1999 financial results and condition,
including various violations of generally accepted accounting principles. The
lawsuit purports to be brought on behalf of a class consisting of all persons
who purchased the Company's common stock in the period from April 1998 through
April 2000. The Company intends to defend itself vigorously. It is not possible
to predict the impact that these lawsuits may have on the Company, nor is it
possible to predict whether any other suits or claims may arise out of these
matters in the future. However, it is possible that the present or any future
lawsuits, and any investigations or proceedings arising out of the same or
related facts, depending on their outcomes, could have a material adverse impact
on the Company's financial condition or results of operations in one or more
future periods. The Company has not recorded any liability for these lawsuits as
of December 31, 2000.

      ATP is not a party to any other legal proceedings, other than routine
claims and lawsuits arising in the ordinary course of its business. ATP does not
believe that such claims and lawsuits, individually or in the aggregate, will
have a material adverse effect on the Company's consolidated financial position,
results of operations or cash flows. Compliance with federal, state, local and
foreign laws and regulations pertaining to the discharge of materials into the
environment, or otherwise relating to the protection of the environment, has not
had, and is not anticipated to have, a material effect upon the cash flows,
earnings or competitive position of ATP.


                                       12
<PAGE>

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

      On October 12, 2000, at the Annual Meeting of the Company's shareholders,
the Company's shareholders elected Messrs. James S. Carter, Gary L. Forbes and
General Johnnie E. Wilson as Class III Directors, and John M. Simon as a Class
II Director. A total of 3,960,881, or 97.5% of the shares of the Company's
common stock present in person or represented by proxy at the Annual Meeting,
voted in favor of the election of Mr. Carter, and 100,873 withheld; 3,980,670,
or 98.0% of the shares of the Company's common stock present in person or
represented by proxy at the Annual Meeting, voted in favor of the election of
Mr. Forbes, and 81,084 withheld; 3,980,931, or 98.0% of the shares of the
Company's common stock present in person or represented by proxy at the Annual
Meeting, voted in favor of the election of Mr. Wilson, and 80,823 withheld; and
3,977,726, or 97.9% of the shares of the Company's common stock present in
person or represented by proxy at the Annual Meeting, voted in favor of the
election of Mr. Simon, and 84,028 withheld.

     Messrs. Alan W. Baldwin's, Robert C. Sigrist's and Lawrence E. Wesneski's
terms of office as Class I Directors continued after the Annual Meeting. Messrs.
Garrett L. Dominy's and Sam P. Douglass's terms of office as Class II Directors
continued after the Annual Meeting.

      At the Annual Meeting, the Company's shareholders also ratified the 2000
Advanced Technical Products, Inc. Stock Option Plan. A total of 2,936,968, or
94.6% of the shares of the Company's common stock present in person or
represented by proxy at the Annual Meeting, voted in favor of ratification,
144,106 voted against ratification and 24,998 abstained.

      At the Annual Meeting, the Company's shareholders also ratified the 2000
Advanced Technical Products, Inc. Non-Employee Directors Stock Option Plan. A
total of 2,902,512 or 93.4% of the shares of the Company's common stock present
in person or represented by proxy at the Annual Meeting, voted in favor of
ratification, 176,760 voted against ratification and 26,800 abstained.

      At the Annual Meeting, the Company's shareholders also ratified the
appointment of KPMG LLP as the Company's independent public accountants for
2000. A total of 3,983,765, or 98.1% of the shares of the Company's common stock
present in person or represented by proxy at the Annual Meeting, voted in favor
of ratification, 54,173 voted against ratification and 23,816 abstained.


                                       13
<PAGE>

                                     PART II

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

     ATP's common stock is traded on the National Market System of the Nasdaq
Stock Market, Inc. under the symbol ""TPX". The following table sets forth the
high and low sales prices of ATP common stock for the calendar quarters
indicated, as reported by the Nasdaq Stock Market, Inc.:

                                                         Market Price
                                                         ------------

       Fiscal Year Ended December 31,                   High         Low
       ------------------------------                   ----         ---

       2000
       First Quarter..........................        $14.312      $ 4.000
       Second Quarter.........................        $ 7.937      $ 3.218
       Third Quarter..........................        $ 4.000      $ 1.781
       Fourth Quarter.........................        $ 8.468      $ 2.750

       1999
       First Quarter..........................        $11.000       $7.500
       Second Quarter.........................        $14.250       $8.875
       Third Quarter..........................        $13.875      $10.750
       Fourth Quarter.........................        $14.000      $12.875

- ----------

     On March 30, 2001, ATP had approximately 1,600 stockholders of record. The
last reported sales price of ATP's common stock on such date was $6.9375.

     ATP has not paid dividends on its common stock and does not currently
intend to pay any cash dividends in the foreseeable future. The determination of
the amount of future cash dividends to be declared and paid on the common stock
of ATP, if any, will depend upon ATP's financial condition, earnings and cash
flows from operations, the level of its capital expenditures, its future
business prospects and other factors that the Board of Directors of ATP deems
relevant. In addition, ATP's debt agreements contain covenants restricting the
payment of cash dividends to ATP's common stockholders.


                                       14
<PAGE>

ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA

     The selected financial data presented below as of and for the years ended
December 31, 1996 through December 31, 2000, have been derived from the audited
financial statements of ATP and TPG.

     The information presented below should be read in conjunction with Item 7,
"Management's" Discussion and Analysis of Financial Condition and Results of
Operations," the consolidated financial statements of ATP and related notes and
other financial information included elsewhere in this Annual Report on Form
10-K.

<TABLE>
<CAPTION>
                                                                                          ATP                                 TPG
                                                                ------------------------------------------------------     ---------
                                                                   2000           1999           1998           1997          1996
                                                                ---------      ---------      ---------      ---------     ---------
<S>                                                             <C>            <C>            <C>            <C>           <C>
Income Statement Data:

Net revenues                                                    $ 170,725      $ 159,777      $ 142,617      $ 116,870     $ 126,534
Cost of revenues                                                  130,466        124,189        111,005         89,308        94,365
                                                                ---------      ---------      ---------      ---------     ---------
Gross profit                                                       40,259         35,588         31,612         27,562        32,169
General and administrative
    expenses                                                       24,628         24,019         21,310         18,593        21,758
                                                                ---------      ---------      ---------      ---------     ---------
Operating income                                                   15,631         11,569         10,302          8,969        10,411
Interest expense                                                    3,409          2,661          2,564          2,208         2,377
Other expense                                                         203             --             --             --            --
                                                                ---------      ---------      ---------      ---------     ---------
Income before income taxes
   and extraordinary items                                         12,019          8,908          7,738          6,761         8,034
Income tax expense                                                  4,628          3,430          2,979          2,603         3,093
                                                                ---------      ---------      ---------      ---------     ---------
Income before extraordinary items                                   7,391          5,478          4,759          4,158         4,941
Extraordinary item (1)                                                 --             --             --             --           667
                                                                ---------      ---------      ---------      ---------     ---------
Income from continuing operations                                   7,391          5,478          4,759          4,158         4,274

Income (loss) from discontinued operations
   (net of income taxes)                                          (14,713)        (8,638)          (760)            50            --
                                                                ---------      ---------      ---------      ---------     ---------
Net income (loss)                                               $  (7,322)     $  (3,160)     $   3,999      $   4,208     $   4,274
                                                                =========      =========      =========      =========     =========

EPS Data:
   Basic:
       Income from continuing operations                        $    1.37      $    1.02      $    0.89      $    0.98     $    1.06
       Income (loss) from discontinued operations                   (2.76)         (1.63)         (0.15)          0.01            --
                                                                ---------      ---------      ---------      ---------     ---------
       Net income (loss)                                        $   (1.39)     $   (0.61)     $    0.74      $    0.99     $    1.06
                                                                =========      =========      =========      =========     =========

   Diluted:
       Income from continuing operations                        $    1.32      $    0.98      $    0.85      $    0.94     $    1.03
       Income (loss) from discontinued operations                   (2.66)         (1.57)         (0.14)          0.01            --
                                                                ---------      ---------      ---------      ---------     ---------
       Net income (loss)                                        $   (1.34)     $   (0.59)     $    0.71      $    0.95     $    1.03
                                                                =========      =========      =========      =========     =========

Balance Sheet Data:

Working capital                                                 $  24,680      $  15,518      $  16,434      $  16,480     $  18,462
Total assets                                                       98,306        101,998        100,677         85,423        44,723
Long-term debt, including
    current portion                                                27,139         26,065         23,375         18,955        17,222
Redeemable 8% cumulative
    preferred stock                                                 1,000          1,000          1,000          1,000         1,000
Common shareholders' equity                                        20,327         27,816         30,109         26,494         7,018
</TABLE>

(1)  Reflects an extraordinary loss from debt refinancing, net of an income tax
     benefit of $418,000.


                                       15
<PAGE>

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

     The following discussion should be read in conjunction with the
consolidated financial statements of ATP and related notes contained elsewhere
in this Annual Report on Form 10-K.

     On May 29, 1998, ATP acquired all of the capital stock of Brigantine S.A.,
a manufacturer of honeycomb products and engineered panels located in France.
The acquired company, renamed Alcore Brigantine S.A., operates as a subsidiary
of Alcore, Inc., which is a subsidiary of the Company. The Alcore and Alcore
Brigantine S.A. operations are accounted for as a discontinued operation of the
Company. The Company's consolidated financial statements include the operating
results for Alcore Brigantine S.A. since the date of the acquisition.

     Historically, approximately 60% to 80% of ATP's products and services have
been sold to the United States government through prime contracts directly with
governmental agencies, primarily the DOD, or through subcontracts with other
governmental contractors. During the mid-1980s, the defense industry began to be
negatively impacted by a perceived reduction of threats from the former Soviet
Union and affiliated countries in eastern Europe. In addition, increased
competition for the United States federal budget dollars resulted in a reduction
in real dollars in the United States defense budget over the last decade.
Defense spending has recently begun to stabilize in the United States, and
management of ATP believes that budgeted procurement spending will increase
slightly over the next few years.

     The contraction of the United States defense budget over the last decade
and the resulting excess capacity and intensified competition among defense
contractors has resulted in significant industry consolidation. ATP's strategy
includes the pursuit of acquisitions which will increase its revenue base and
improve its cost competitiveness through reduced overhead costs, facility
consolidations and the elimination of other duplicative costs. However, because
of the uncertainty of the nature and size of these opportunities, as well as
ATP's financial leverage, there can be no assurances that the financing
necessary to pay for acquisitions can be obtained on commercially reasonable
terms, if at all.

     Although the long-term impact of industry consolidation and the defense
spending budget cannot be predicted with certainty, management of ATP believes
that it is positioned to increase its presence in the United States defense
industry and increase its ongoing diversification efforts into foreign defense
markets and selected commercial markets.


                                       16
<PAGE>

     The United States government's fiscal year begins on October 1, and
contracts and options on contracts are generally awarded just prior to its year
end. ATP's experience indicates that the lead time to perform the necessary
design work, procure material and begin production is generally several months,
and this can create a period of low production, revenue and profits in the first
half of each fiscal year of ATP. Over the last five years, the percentage of
sales and operating earnings (excluding corporate general and administrative
expenses) generated in the second half of the year have been as follows:

                                                          EARNINGS BEFORE
YEAR (1)                                      SALES      INTEREST & TAXES
- --------                                      -----      ----------------

2000 ....................................      50%             56%

1999 ....................................      50%             47%

1998 ....................................      59%             80%

1997 ....................................      56%             74%

1996 ....................................      56%             64%

(1)      All years' included are based on results of continuing operations

Restatement of Previously Reported Financial Statements

       During January 2000, the Company learned of possible accounting and
financial reporting irregularities at its subsidiary, Alcore, when certain
financial records were seized in connection with a search warrant issued by the
United States District Court - District of Maryland as part of a governmental
investigation. Additionally, the Company has been notified of an investigation
by the United States Securities and Exchange Commission regarding these matters.

       After becoming aware of the possible irregularities, the Company engaged
special counsel and forensic accountants to assist in its investigation of the
possible irregularities. As a result, the Company has previously restated its
1998 consolidated financial statements (including its quarterly financial
statements for the first, second and third quarters of 1999).

       Substantially all of the adjustments to restate the 1998 financial
statements relate to operations which have been subsequently classified as
discontinued by the Company and are contained in the restated results of
discontinued operations in the accompanying Consolidated Financial Statements.

       The following discussion of 1998 amounts relates to the Company's results
of operations as restated for the adjustments determined necessary by the
Company's investigation.

Discontinued Operations

     On June 30, 2000, the Company adopted a formal plan to sell its Structural
Core Materials segment, which consists of the operations of the Alcore and
Alcore Brigantine S.A. subsidiaries. During March 2001, the Company announced
that it had entered into a letter of intent for the sale of certain assets of
Alcore and 100% of the stock of the Alcore Brigantine S.A. subsidiary (the
"Transaction"). Consummation of the Transaction is subject to, among other
things, satisfactory


                                       17
<PAGE>

completion of due diligence by the purchaser, execution and delivery of a
definitive purchase agreement and certain third party approvals. The Company
anticipates the Transaction will be closed during the second quarter of 2001.

     The following discussion relates to the Company's results of operations as
restated to account for the Structural Core Materials segment as a discontinued
operation for all years reported.

Results of Operations

         The following table sets forth, for the periods indicated, the
components of the statements of operations expressed as a percentage of
revenues.

                                             2000          1999          1998
                                            -----         -----         -----

Net revenues                                100.0%        100.0%        100.0%
Cost of revenues                             76.4%         77.7%         77.8%
                                            -----         -----         -----
Gross profit                                 23.6%         22.3%         22.2%
General and administrative
    expenses                                 14.4%         15.0%         14.9%
                                            -----         -----         -----
Operating income                              9.2%          7.3%          7.3%
Interest expense                              2.0%          1.7%          1.8%
Other expense                                 0.1%          0.0%          0.0%
                                            -----         -----         -----
Income before income taxes                    7.1%          5.6%          5.5%
Income tax expense                            2.7%          2.1%          2.1%
                                            -----         -----         -----
Income from continuing operations             4.4%          3.5%          3.4%
Loss from discontinued operations
   (net of income taxes)                     (8.6)%        (5.4)%        (0.5)%
                                            -----         -----         -----
Net income (loss)                            (4.2)%        (1.9)%         2.9%
                                            =====         =====         =====

Year Ended December 31, 2000 Compared with the Year Ended December 31, 1999

     Revenues increased $10.9 million, or 6.9% from $159.8 million in 1999 to
$170.7 million in 2000. Positive revenue variations in 2000 compared to 1999
include: (i) increased deliveries of composite components on several long-term
aerospace and defense programs, including the F-18E/F and C-17 military aircraft
and the Airbus A330 and A340 commercial aircraft, (ii) increased shipments of
the Company's commercial composites products and (iii) increased revenues on
chemical defense contracts, primarily from the MICAD program.

     Gross profit as a percentage of revenues was 23.6% in 2000 compared to
22.3% in 1999. The increase in gross profit percentage was primarily
attributable to increased sales of the Commercial Composites business segment
and cost efficiencies associated with increased sales from the other product
lines.

     General and administrative expenses increased $0.6 million, or 2.5%, from
$24.0 million in 1999 to $24.6 million in 2000. General and administrative
expenses include non-recurring charges of $1.3 million recorded in the second
quarter of 2000, including costs incurred in


                                       18
<PAGE>

connection with the termination of a January 2000 merger agreement and severance
costs. Excluding the non-recurring charges, general and administrative expenses,
as a percentage of revenues, decreased from 15.0% in 1999 to 13.7% in 2000, the
result of higher revenues and reduced general and administrative spending.

     Operating income was $15.6 million, or 9.2% of revenues, in 2000, compared
to $11.6 million, or 7.3% of revenues, in 1999. Excluding the non-recurring
general and administrative costs of $1.3 million discussed in the previous
paragraph, operating income was $16.9 million in 2000, an increase of $5.3
million, or 46.1%, compared to 1999. The increase in operating income results
primarily from increased revenues, improved operating results of the Commercial
Composites segment and increased profits on advanced composite components
delivered on certain Aerospace and Defense programs.

     Interest expense in 2000 increased $748,000, or 28.1%, primarily the result
of an increase in average loan balances outstanding and an increase in average
interest rates during 2000 compared to 1999.

     Income tax expense was $4.6 million in 2000 compared to $3.4 million in
1999. The increase results from higher income before taxes as the effective
income tax rate was 38.5% for both years.

     Total loss from discontinued operations increased by $6.1 million, from
$8.6 million in 1999 to $14.7 million in 2000. The 2000 loss includes an
after-tax provision of $10.0 million for the estimated loss on disposal of the
discontinued Structural Core Material business segment.

Year Ended December 31, 1999 Compared with the Year Ended December 31, 1998

     Revenues increased $17.2 million, or 12.0% from $142.6 million in 1998 to
$159.8 million in 1999. The increase in revenues in 1999 was primarily
attributable to the following factors: (i) increased revenues on chemical
defense contracts, including two large contracts which were in the design or
start-up phase during most of 1998 and were in full production during all of
1999, (ii) increased deliveries of composite components on several long-term
aerospace / defense programs, including the C-17 and F-18E/F military aircraft
and (iii) increased shipments of the Company's commercial products, including
specialty vehicle electronics and NGV fuel tanks. These increases were partially
offset by a decrease in shipments on shelter contracts.

      Gross profit as a percentage of revenues was 22.3% in 1999, compared to
22.2% for the comparable period in 1998. An increase in the gross profit rate on
revenues of the Company's Commercial Composites business segment were nearly
offset by a decrease in profit rates on revenues of the Aerospace and Defense
business segment.

     General and administrative expenses increased $2.7 million, or 12.7%, from
$21.3 million in 1998 to $24.0 million in 1999. The increase reflects: (i)
higher corporate expense primarily resulting from nonrecurring costs incurred in
connection with a proposed merger of the Company and (ii) a general increase in
business activity. As a percentage of revenues, general and administrative
expenses increased from 14.9% in 1998 to 15.0% in 1999.


                                       19
<PAGE>

     Operating income was $11.6 million in 1999, compared to $10.3 million in
1998. The increase is primarily attributable to the increased sales volume.
Operating income as a percentage of revenues was 7.3% for both 1999 and 1998.

     Interest expense in 1999 increased $97,000, primarily the result of an
increase in average loan balances outstanding and an increase in average
interest rates during 1999 compared to 1998.

     Income tax expense was $3.4 million in 1999 compared to $3.0 million in
1998. The increase results from higher income before taxes as the effective
income tax rate was 38.5% for both years.

     Total loss from discontinued operations increased by $7.8 million, from
$0.8 million in 1998 to $8.6 million in 1999. The 1999 discontinued operations
results reflect losses incurred at Alcore primarily the result of: (i)
production inefficiencies experienced in the moving of certain operations to a
new leased facility, including abnormally high production scrap rates and
increased costs for machinery and equipment re-arrangement and set-up, (ii)
lower sales prices caused by intensified competition in the commercial aerospace
industry and (iii) a write-off of excess and obsolete inventories and capital
equipment.

Financial Condition and Liquidity

     Cash flow used in operations was $312,000 in 2000 compared to $5.7 million
of cash flow provided by operations in 1999. Working capital, excluding
short-term debt balances, increased $8.8 million in 2000 to $52.2 million. This
increase was the result of (i) an increase of $7.1 million in accounts
receivable, resulting primarily from higher sales volume in the last quarter of
2000 compared to 1999 and an increase in the percentage of revenues generated by
commercial customers which, in general have a tendency to be slower paying than
the Company's Aerospace and Defense customers, (ii) an increase of $1.2 million
in inventory, reflecting generally higher business activity levels, (iii) an
increase of $1.0 million in cash and cash equivalents, primarily the result of
$700,000 of collateral payments made during 2000 in connection with a letter of
credit agreement between the Company and a bank and (iv) a net decrease in other
working capital components of $0.5 million. Net cash used in investing
activities totaled $1.6 million in 2000, and resulted exclusively from capital
expenditures.

     On October 10, 2000, the Company entered into a new financing agreement
with its primary lender. At December 31, 2000, the Company's credit facility
with this lending institution totaled $46.0 million consisting of: (1) $27.0
million of revolving credit against eligible receivable and inventory balances,
(2) a $16.6 million term loan and (3) a $2.4 million capital equipment loan. As
of December 31, 2000, the Company had approximately $3.5 million of unused
borrowing availability on this credit facility, net of $1.7 million of reserves
against the revolving loan borrowing base for outstanding stand-by letters of
credit commitments and other items. The term loan is payable quarterly based on
a seven-year amortization period. Equipment loan principal payments are made
monthly based on a five-year amortization period. The interest rates on the
loans are set quarterly based on the Company's performance against
debt-to-earnings ratios specified in the agreement. Interest rates can range
from LIBOR (the London Interbank Offered Rates) plus 2.75% to LIBOR plus 1.0% on
the revolving loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and
equipment loans. Alternatively, the Company may elect interest rates based on
the lending institution's prime rate with the revolving loan ranging from prime
plus


                                       20
<PAGE>

0.5% to prime plus 0.25% and the term and equipment loans ranging from prime
plus 0.75% to prime plus 0.50%. Interest is paid monthly in arrears on all
loans. The credit facility matures on October 31, 2003. The Company is subject
to several financial and nonfinancial covenants under the $46.0 million credit
facility. At December 31, 2000, the Company was in violation of certain
financial covenants. Such violations were cured as a result of an amendment to
the agreement dated March 30, 2001.

     During October 2000, the Company entered into an agreement with a lender
for a three year, $7,000,000 loan in the form of a junior secured credit
facility. The loan bears interest payable monthly in arrears at an annual rate
of 12.5%, and an additional 2.5% of payment-in-kind interest that is payable at
maturity. The loan matures in October 2003. In connection with the loan, ATP
also issued warrants giving the lender the right to purchase 320,000 shares of
the Company's common stock at an exercise price of $4.42 per share. The warrants
are exercisable at any time prior to the fifth anniversary of the credit
facility closing. Alternatively, at any time after 18 months from the closing,
but prior to the expiration of the warrants, the lender may elect to require the
Company to repurchase each warrant for an amount equal to 10% of ATP's EBITDA
(earnings before interest, taxes, depreciation and amortization) divided by
320,000 ("Put Option"). The Put Option is subject to a maximum cap of
$1,750,000. In the event of an exercise of the Put Option resulting in a
repurchase price of $1,000,000 or greater, the Company has the right to satisfy
up to 50% of the obligation by issuing a promissory note to the lender, with
principal payments amortized evenly over 18 months. The Company is subject to
several financial and nonfinancial covenants under the loan agreement. At
December 31, 2000, the Company was in violation of certain financial covenants.
Such violations were cured as a result of an amendment to the agreement dated
April 2, 2001.

      At December 31, 2000, the Company's backlog of orders and long-term
contracts was approximately $559 million compared to $549 million and $552
million at December 31, 1999 and 1998, respectively. The backlog includes firm
released orders of approximately $156 million, $146 million and $161 million at
December 31, 2000, 1999 and 1998, respectively. Approximately 80% of the
Company's firm released backlog at December 31, 2000 is expected to be delivered
in 2001.

     As discussed above, the Company has made capital expenditures totaling $1.6
million during 2000, which have been financed by increased borrowings under the
revolving loan portion of the Company's credit facility. The Company invested
approximately $13.8 million in capital equipment and facility improvements
during the two-year period ending December 31, 1999. These investments were made
primarily in support of several new long-term aerospace and defense contracts
that are now in full production, and facility and equipment upgrades relating to
NGV tank production. As a result, management believes that future short-term
capital spending requirements will be limited to a normal sustaining maintenance
level plus a relatively low amount of expenditures that will be cost justified
by anticipated incremental program revenues. However, the Company will consider
other future capital expenditure investments beyond the maintenance level when
such investments are deemed to be strategic or critical to the Company's growth.

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

     Management of ATP believes that cash flows from operations, available
borrowings under its current credit facility and the additional subordinated
financing obtained during October 2000 are


                                       21
<PAGE>

adequate to sustain the Company's current operating level and expected growth
for the next one to three years. However, should circumstances arise affecting
cash flow or requiring capital expenditures beyond those anticipated by the
Company, there can be no assurance that such funds will be available on
commercially reasonable terms, if at all.

Factors Affecting Future Operating Results

     This Annual Report on Form 10-K contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. The
forward-looking statements are those that do not state historical facts and are
inherently subject to risk and uncertainties. The forward-looking statements
contained herein are based on current expectations and entail various risks and
uncertainties that could cause actual results to differ materially from those
projected in such forward-looking statements. Some of such risks and
uncertainties are described below.

     Dependence on Principal Industries. The revenues of ATP are concentrated in
the aerospace and defense industries. Sales to non-aerospace and non-defense
industries, although growing, are anticipated to approximate 20% to 25% of total
revenues of ATP for the foreseeable future. ATP's success will be heavily
dependent on its ability to successfully obtain major new defense orders
currently planned to be released by the United States government and government
prime contractors, as well as the continued strength of the aerospace industry,
particularly the commercial aircraft industry. No assurances can be given that
ATP will be able to successfully obtain all or even a major portion of the
targeted defense industry orders anticipated to be placed. The commercial
aerospace industry is a cyclical business, and the demand by commercial airlines
for new aircraft is highly dependent upon a variety of factors, which
historically have been related to the stability and health of the United States
and world economies.

     Risks of Reductions or Changes in Military Expenditures. The primary
customers of ATP are agencies of the DOD. Sales under contracts with the DOD or
under subcontracts that identify the DOD as the ultimate purchaser represented
approximately 69% of ATP's 2000 revenues. The United States defense budget has
declined in real terms since the mid-1980s, resulting in some delays in new
program starts, program stretch-outs and program cancellations. The United
States defense budget has begun to stabilize and even increased in real dollars
over the last several years. A major portion of ATP's DOD business is expected
to be funded by the procurement and research, development, test and evaluation
segments of the defense budget. Procurement and research, development, test and
evaluation funding has been significantly reduced over the last decade but is
expected to remain relatively stable or grow slightly over the next decade. A
significant portion of ATP's DOD business is also expected to be funded by the
operations and maintenance portion of the DOD budget, which has declined less
than the other segments. A further significant decline or reallocation of the
procurement, research, development, test and evaluation or operations and
maintenance segments of the DOD budget could materially and adversely affect
ATP's"sales and earnings. The loss or significant curtailment of ATP's material
United States defense contracts would also materially and adversely affect ATP's
future sales and earnings.

     Competition. The market for ATP's products is highly competitive. ATP
competes with numerous competitors, a number of which possess substantially
greater financial, marketing, personnel and other resources. Continued
consolidation of major aerospace companies could result in program cancellations
as well as increased demand for price concessions. This, together with increased
competition for available business, could translate into downward pressure on


                                       22
<PAGE>

gross margins with resulting lower overall profit margins. Vendor prices for
production materials such as resins, liquid and film adhesives, reinforcing
fiber materials and other materials and supplies could increase as demand for
aircraft parts and assemblies increase to match higher build rates for
commercial and military aircraft. Higher material prices and demand for lower
aircraft part and assembly prices could place increasing pressure on ATP's
operating margins and net income. Although management of ATP believes that the
Company is well-positioned to maintain or improve its place among its
competitors, there can be no assurance that ATP will be able to compete
successfully in the future.

     Financial Leverage. ATP has a significant amount of indebtedness, which
could make it difficult to obtain additional financing for working capital,
capital expenditures, acquisitions or other purposes. Moreover, the terms of
ATP's indebtedness impose various restrictions and covenants on ATP which could
potentially limit ATP's ability to respond to market conditions or to take
advantage of business opportunities. ATP's ability to meet its debt service
obligations and to reduce total debt will be dependent upon its future
performance, which, in turn, will be subject to general conditions in the
aerospace and defense industries and to financial, business and other factors
affecting the operations of ATP, many of which will be beyond its control.

     Other Factors. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets, liabilities, income
and expenses, and disclosure of contingent assets and contingent liabilities at
the date of the financial statements and during the reporting period. Actual
results could differ materially from those estimates.

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

Year 2000 Issues

     ATP completed its year 2000 (Y2K) preparation plan which included the
following steps: assessment, modification / implementation and testing. The
Company has not experienced any significant malfunctions or errors in its
internal information technology ("IT") and non-IT systems that are critical to
its operations since January 1, 2000. A few minor application problems were
identified and resolved early in the year 2000. The Company is not aware of any
significant Y2K issues or problems that may have arisen for its significant
customers and suppliers. Based on currently available information, the Company
is not aware of any significant continued exposure to Y2K systems issues.

    ATP's Y2K costs have not been budgeted and tracked as independent projects,
but have been incurred in conjunction with normal sustaining activities. ATP
estimates that such costs, including the replacement or upgrading of outdated,
noncompliant hardware and software were less than $250,000.

Recent Accounting Pronouncements

      SFAS No. 133, Accounting for Derivative Instruments and Hedging
Activities, as amended, is effective for the Company beginning January 2001. The
new Statement requires all derivatives to be recorded on the balance sheet at
fair value and establishes accounting treatment for three types of hedges:
hedges of changes in the fair value of assets, liabilities or firm commitments,
hedges


                                       23
<PAGE>

of the variable cash flows of forecasted transactions, and hedges of foreign
currency exposures of net investments in foreign operations. The Company does
not anticipate there will be a material impact on the results of operations or
financial position upon adoption of this standard.

     In September 1999, the Financial Accounting Standards Board issued Emerging
Issues Task Force ("EITF") Issue No. 99-5, Accounting for Pre-Production Costs
Related to Long-Term Supply Arrangements. Among other things, EITF Issue No.
99-5 provides additional guidance on how entities should account for costs
incurred to design and develop molds, dies, and tooling that will be used to
produce products that will be sold under long-term supply arrangements. The
Company adopted the provisions of EITF Issue No. 99-5 on January 1, 2000. As a
result, there was no material impact on the results of operations for any
periods reported.

     In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101, Revenue Recognition in Financial Statements, which
clarifies certain conditions to be met in order to recognize revenue. The
adoption of guidelines contained in Staff Accounting Bulletin No. 101 did not
materially impact the results of operations for any periods reported.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company is exposed to changes in interest rates primarily relating to
its $46.0 million credit facility. However, the carrying value of borrowings
under the credit facility generally approximate fair value due to the variable
rate nature of such borrowings. The interest rates are set quarterly based on
the Company's performance against debt-to-earnings ratios specified in the
agreement. Interest rates can range from LIBOR plus 2.75% to LIBOR plus 1.0% on
the revolving loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and
equipment loans. Alternatively, the Company may elect interest rates based on
the lending institution's prime rate with the revolving loan ranging from prime
plus 0.5% to prime plus 0.25% and the term and equipment loans ranging from
prime plus 0.75% to prime plus 0.50%. At December 31, 2000, the Company had
$40.9 million outstanding under the credit facility at a weighted-average
interest rate of 9.71%.

     In addition, the Company has $2.0 million of bonds payable at December 31,
2000 for which it has entered an interest rate swap agreement with a financial
institution to fix the interest rate at 5.07% through the year 2012.

     The Company has not entered into transactions which subject it to material
foreign currency transaction gains and losses.


                                       24
<PAGE>

ITEM 8. FINANCIAL STATEMENTS


                          Independent Auditors' Report


The Board of Directors and Shareholders
Advanced Technical Products, Inc.:


We have audited the accompanying consolidated balance sheets of Advanced
Technical Products, Inc. and subsidiaries (the "Company") as of December 31,
2000 and 1999, and the related consolidated statements of operations,
comprehensive income (loss), and cash flows for each of the years in the
three-year period ended December 31, 2000. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Advanced Technical
Products, Inc. and subsidiaries at December 31, 2000 and 1999, and the results
of their operations and their cash flows for each of the years in the three-year
period ended December 31, 2000 in conformity with accounting principles
generally accepted in the United States of America.


                                                   /S/ KPMG LLP


Atlanta, Georgia
February 23, 2001, except as to Note 8,
which is as of April 2, 2001


                                       25
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999

                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                                              2000           1999
                                                                                                           ---------      ---------
<S>                                                                                                        <C>              <C>
                                     ASSETS
CURRENT ASSETS:
    Cash and cash equivalents                                                                              $   1,666      $     655
    Accounts receivable (net of allowance for doubtful accounts of $455 in 2000 and
        $541 in 1999)                                                                                         25,811         18,674
    Inventories and costs relating to long-term contracts and programs in
        process, net of progress payments                                                                     42,742         41,576
    Prepaid income taxes                                                                                       1,251          2,054
    Other prepaid expenses                                                                                     1,252            378
    Deferred income taxes                                                                                      3,284          3,900
                                                                                                           ---------      ---------
                        Total current assets                                                                  76,006         67,237
                                                                                                           ---------      ---------

PROPERTY, PLANT AND EQUIPMENT:
    Buildings and improvements                                                                                 2,307          2,282
    Machinery and equipment                                                                                   16,696         15,534
    Construction in progress                                                                                     929          1,096
    Less-accumulated depreciation                                                                            (10,931)        (8,196)
                                                                                                           ---------      ---------
                        Net property, plant and equipment                                                      9,001         10,716
                                                                                                           ---------      ---------

DEFERRED INCOME TAXES                                                                                          2,819            778

NET ASSETS OF DISCONTINUED OPERATIONS                                                                          6,971         20,359

OTHER NONCURRENT ASSETS                                                                                        3,509          2,908
                                                                                                           ---------      ---------
                        Total assets                                                                       $  98,306      $ 101,998
                                                                                                           =========      =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
    Accounts payable                                                                                       $  13,259      $  13,998
    Accrued expenses                                                                                          10,529          9,773
    Short-term debt                                                                                           27,497         27,881
    Current portion of capital lease obligations                                                                  41             67
                                                                                                           ---------      ---------
                        Total current liabilities                                                             51,326         51,719

LONG-TERM LIABILITIES:
    Long-term debt, net of current portion                                                                    21,370         19,696
    Capital lease obligations, net of current portion                                                             30             74
    Other liabilities                                                                                          4,253          1,693
                                                                                                           ---------      ---------
                        Total liabilities                                                                     76,979         73,182

Mandatorily redeemable preferred stock, 8% cumulative, redeemable, $1.00 par
    value, 1,000,000 shares authorized, issued and outstanding                                                 1,000          1,000

SHAREHOLDERS' EQUITY:
    Preferred stock, undesignated, 1,000,000 shares authorized, no shares issued and outstanding                  --             --
    Common stock, $.01 par value, 30,000,000 shares authorized, 5,375,822 shares and 5,306,438
       shares issued and outstanding as of December 31, 2000 and 1999, respectively                               54             53
    Additional paid-in capital                                                                                17,151         16,816
    Retained earnings                                                                                          3,653         11,055
    Notes receivable from officers                                                                              (135)          (135)
    Accumulated other comprehensive income (loss)                                                               (396)            27
                                                                                                           ---------      ---------
                        Total shareholders' equity                                                            20,327         27,816
                                                                                                           ---------      ---------
                        Total liabilities and shareholders' equity                                         $  98,306        101,998
                                                                                                           =========      =========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.



                                       26
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
              For the Years Ended December 31, 2000, 1999 and 1998

                (Dollars in thousands, except per share amounts)


<TABLE>
<CAPTION>
                                                                                        2000              1999              1998
                                                                                    -----------       -----------       -----------
<S>                                                                                 <C>               <C>               <C>
Revenues                                                                            $   170,725       $   159,777       $   142,617

Cost of revenues                                                                        130,466           124,189           111,005

General and administrative expenses                                                      24,628            24,019            21,310
                                                                                    -----------       -----------       -----------
        Operating income                                                                 15,631            11,569            10,302

Interest expense                                                                          3,409             2,661             2,564

Other expense                                                                               203                --                --
                                                                                    -----------       -----------       -----------
        Income before income tax expense                                                 12,019             8,908             7,738

Income tax expense                                                                        4,628             3,430             2,979
                                                                                    -----------       -----------       -----------
        Income from continuing operations                                                 7,391             5,478             4,759

Discontinued operations:
        Loss from operations of segment to be disposed of                                (2,322)           (8,638)             (760)
        Provision for loss on disposal of business segment,
            including operating losses during the phase-out period                      (12,391)               --                --
                                                                                    -----------       -----------       -----------
        Loss from discontinued operations (net of income tax benefit)                   (14,713)           (8,638)             (760)

Net income (loss)                                                                   $    (7,322)      $    (3,160)      $     3,999
                                                                                    ===========       ===========       ===========

Net income (loss) per share:
        Basic:   Income from continuing operations                                  $      1.37       $      1.02       $      0.89
                 Loss from discontinued operations                                        (2.76)            (1.63)            (0.15)
                                                                                    -----------       -----------       -----------
                 Net income (loss)                                                  $     (1.39)      $     (0.61)      $      0.74
                                                                                    ===========       ===========       ===========

        Diluted: Income from continuing operations                                  $      1.32       $      0.98       $      0.85
                 Loss from discontinued operations                                        (2.66)            (1.57)            (0.14)
                                                                                    -----------       -----------       -----------
                 Net income (loss)                                                        (1.34)            (0.59)             0.71
                                                                                    ===========       ===========       ===========

Weighted average number of common and common
     equivalent shares outstanding:
        Basic                                                                         5,337,775         5,273,214         5,270,520
                                                                                    ===========       ===========       ===========
        Diluted                                                                       5,532,786         5,503,905         5,526,130
                                                                                    ===========       ===========       ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       27
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
              For the Years Ended December 31, 2000, 1999 and 1998

                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                2000          1999          1998
                                                              -------       -------       -------
<S>                                                           <C>           <C>           <C>
Net income (loss)                                             $(7,322)      $(3,160)      $ 3,999

Other comprehensive income (loss):
       Minimum pension liability adjustment                      (367)          601          (320)

       Foreign currency translation adjustment                    (56)           51            --

                                                              -------       -------       -------
Comprehensive income (loss)                                   $(7,745)      $(2,508)      $ 3,679
                                                              =======       =======       =======
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       28
<PAGE>

               ADVANCED TECHNICAL PRODUCTS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              For the Years Ended December 31, 2000, 1999 and 1998

                             (Dollars in thousands)


<TABLE>
<CAPTION>
                                                                                                   2000         1999         1998
                                                                                                 --------     --------     --------
<S>                                                                                              <C>          <C>          <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net income (loss)                                                                            $ (7,322)    $ (3,160)    $  3,999
    Adjustments to reconcile net income (loss) to net cash provided by
        (used in) operating activities:
          Depreciation and amortization                                                             2,906        2,996        2,105
          Deferred income taxes                                                                    (1,195)      (2,287)         (17)
          Other non-cash charges                                                                      136           --           22
          Estimated loss on disposition of discontinued operations                                 13,517           --           --
          Changes in operating assets and liabilities:
                       Accounts receivable                                                         (7,137)       5,391         (648)
                       Inventories                                                                 (1,166)      (6,672)      (5,044)
                       Other assets and liabilities                                                  (560)      (1,425)        (256)
                       Accounts payable                                                              (739)       1,745          249
                       Accrued expenses                                                               796        3,218         (726)
                       Net assets of discontinued operations                                          452        5,897          993
                                                                                                 --------     --------     --------
                                  Net cash provided by (used in) operating activities                (312)       5,703          677
                                                                                                 --------     --------     --------

CASH FLOWS FROM INVESTING ACTIVITIES:
          Capital expenditures                                                                     (1,020)      (3,018)      (5,633)
          Cash payments for businesses acquired, net of cash acquired                                  --           --       (2,907)
          Net investing activities of discontinued operations                                        (553)      (2,010)      (3,111)
                                                                                                 --------     --------     --------
                                 Net cash used in investing activities                             (1,573)      (5,028)     (11,651)
                                                                                                 --------     --------     --------

CASH FLOWS FROM FINANCING ACTIVITIES:
          Proceeds of borrowings                                                                    7,146        3,163       19,527
          Repayments of borrowings                                                                 (4,228)      (3,638)      (8,084)
          Proceeds from exercise of stock options and warrants                                         12           90           16
          Common stock issued under employee stock purchase plan                                      188          205           --
          Cash dividends paid                                                                        (120)         (40)         (40)
          Payments under capital lease obligations                                                    (70)         (55)         (46)
          Net financing activities of discontinued operations                                         (32)        (962)         324
                                                                                                 --------     --------     --------
                                 Net cash provided by (used in) financing activities                2,896       (1,237)      11,697
                                                                                                 --------     --------     --------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                                1,011         (562)         723

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                                          655        1,217          494
                                                                                                 --------     --------     --------

CASH AND CASH EQUIVALENTS, END OF YEAR                                                           $  1,666     $    655     $  1,217
                                                                                                 ========     ========     ========

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING ACTIVITIES:
          Assets acquired through capital leases                                                 $     --     $    504     $    416

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
          Cash paid for interest                                                                 $  4,347     $  3,911     $  3,635
          Cash paid for income taxes                                                             $    142     $  3,236     $  3,776
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                       29
<PAGE>

                        ADVANCED TECHNICAL PRODUCTS, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                        December 31, 2000, 1999 and 1998


1. SIGNIFICANT ACCOUNTING POLICIES

     Principles of Consolidation

          The consolidated financial statements include the accounts of Advanced
          Technical Products, Inc. (the "Company" or "ATP") and its
          subsidiaries, all of which are 100% owned. The Company is incorporated
          in the state of Delaware, with corporate headquarters located in
          Roswell, Georgia. Principal manufacturing operations are located in
          Marion, Virginia; Lincoln, Nebraska; Deland, Florida; and Glen Cove,
          New York. The Company's subsidiaries include: Technical Products
          Group, Inc., Alcore, Inc. ("Alcore"), Marion Properties, Inc., Lincoln
          Properties, Inc., Deland Properties, Inc., and Alcore Brigantine S.A.
          All significant intercompany transactions and balances have been
          eliminated upon consolidation. The Company's financial statements have
          been restated to segregate the results of operations and the net
          assets of the Company's discontinued Structural Core Materials
          segment, which is comprised of Alcore and Alcore Brigantine S.A.

     Revenue Recognition

          Revenues and anticipated profits under long-term fixed price
          production contracts are recorded on the percentage of completion
          method, principally using units-of-delivery as the measurement basis
          for effort accomplished. Delivery of units are generally made upon
          acceptance by the customer in accordance with contract terms.

          Revenues under certain long-term fixed price contracts which require a
          significant amount of development effort in relation to total contract
          value are recorded based on the accomplishment of milestones as
          specified by contract terms. Revenues under cost reimbursable type
          contracts are recorded as costs are incurred.

          Amounts representing claims for equitable adjustment are included in
          estimates of future contract revenues used for preparing estimates of
          contract profitability at completion only when realization is probable
          and amounts can be reasonably estimated. The amounts included in
          estimates of future contract revenues for outstanding claims which had
          not been finalized were approximately $7.4 million and $7.3 million as
          of December 31, 2000 and 1999, respectively.

          Estimated losses on contracts are recorded in full when identified.


                                       30
<PAGE>

     Cash and Cash Equivalents

          Cash equivalents consist of highly liquid financial instruments with
          an original maturity of three months or less.

     Research and Development Costs

          Company-sponsored research and development costs are reported as part
          of general and administrative expenses. Revenues and costs incurred in
          connection with customer-sponsored research and development contracts
          are accounted for as contract revenues and costs.

     Inventories

          Inventories, other than inventoried costs relating to long-term
          contracts and programs, are valued at the lower of first-in, first-out
          cost or market (net realizable value). Inventory cost relating to
          long-term contracts and programs includes material, labor,
          manufacturing overhead and tooling costs dedicated to a contract or
          program. Costs attributed to units delivered under certain long-term
          contracts and programs are based on the estimated average cost of all
          units to be produced as determined under the learning curve concept
          which anticipates a predictable decrease in unit costs as production
          techniques become more efficient through repetition. In accordance
          with industry practice, costs in inventory include amounts relating to
          contracts with long production cycles, some of which are not expected
          to be realized within one year. Customer progress payments received on
          long-term contracts are recorded as an offset to related inventory
          balances.

     Use of Estimates

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          In particular, accounting for long-term contracts requires management
          estimates of future contract revenues and costs used for preparing
          estimates at contract completion and determining contract
          profitability reflected in the financial statements. Actual results
          could differ from those estimates.


                                       31
<PAGE>

     Fair Value of Financial Instruments

          The fair value of the Company's debt is estimated based upon the cash
          flows discounted using the interest rates available to the Company for
          debt with similar terms and remaining maturities. The carrying value
          of the Company's debt approximates fair value due to the variable rate
          nature of the borrowings and/or the short maturity of the borrowings.
          The carrying value of all other financial instruments approximates
          fair value due to the short-term nature of such instruments.

     Property, Plant and Equipment

          Property additions are recorded at cost. Depreciation is charged
          against operations over three to ten years for machinery and equipment
          and seven to forty years for buildings and improvements. Improvements
          to leased property are amortized over the life of the lease or the
          estimated life of the improvement, whichever is shorter. Straight-line
          and accelerated methods of depreciation are used for financial
          reporting and accelerated methods are used for tax purposes where
          permitted. Depreciation expense of continuing operations for the years
          ended December 31, 2000, 1999 and 1998 is $2,735,000, $2,843,000 and
          $1,908,000, respectively.

     Earnings (Loss) Per Share

          Basic earnings (loss) per share is computed by dividing net income
          (loss) available for common shares by the weighted-average number of
          shares of common stock outstanding during the year. Diluted earnings
          (loss) per share is computed by dividing net income (loss) available
          for common shares by the sum of (1) the weighted-average number of
          shares of common stock outstanding during the period, (2) the dilutive
          effect of the assumed exercise of stock options using the treasury
          stock method and (3) the dilutive effect of other potentially dilutive
          securities.

     Stock Options

          The Company has adopted Statement of Financial Accounting Standards
          ("SFAS") No. 123, Accounting for Stock-Based Compensation, which
          permits entities to recognize as expense over the vesting period the
          fair value of all stock-based awards on the date of the grant.
          Alternatively, SFAS No. 123 allows entities to continue to apply the
          provisions of Accounting Principles Board ("APB") Opinion No. 25 and
          provide pro forma net income and pro forma income per share
          disclosures for stock option grants as if the fair-value-based method
          defined in SFAS No. 123 had been applied. The Company has elected to
          continue to apply the provisions of APB Opinion No. 25 and provide the
          pro forma disclosures of SFAS No. 123.


                                       32
<PAGE>

     Income Taxes

          Income taxes are accounted for under the asset and liability method.
          Deferred tax assets and liabilities are recognized for the expected
          future tax consequences attributable to differences between the
          financial statement carrying amounts of existing assets and
          liabilities and their respective tax bases and operating loss and tax
          credit carryforwards. Deferred tax assets and liabilities are measured
          using enacted tax rates expected to apply to taxable income in the
          years in which those temporary differences are expected to be
          recovered or settled. The effect on deferred tax assets and
          liabilities of a change in tax rates is recognized in income in the
          period that includes the enactment date.

     Goodwill

          Goodwill, which represents the excess of purchase price over the fair
          value of net assets acquired, is amortized on the straight-line basis
          over the estimated useful life, but not in excess of 40 years. The
          Company assesses the recoverability of this intangible asset by
          determining whether the amortization of the goodwill balance over its
          remaining life can be recovered through undiscounted future operating
          cash flows of the acquired operation. The amount of goodwill
          impairment, if any, is measured based on projected discounted future
          operating cash flows using a discount rate reflecting the Company's
          average cost of funds. The assessment of the recoverability of
          goodwill will be impacted if estimated future operating cash flows are
          not achieved. During 2000, 1999 and 1998, no such goodwill impairment
          has been identified by the Company, other than that identified as part
          of the 2000 provision for loss on disposal of the Company's
          discontinued Structural Core Materials business segment (see Note 3).

     Long-Lived Assets

          In accordance with SFAS No. 121, Accounting for the Impairment of
          Long-Lived Assets and for Long-Lived Assets to Be Disposed Of, the
          Company reviews for the impairment of long-lived assets whenever
          events or changes in circumstances indicate the carrying amount of an
          asset may not be recoverable. The carrying value of a long-lived asset
          is considered impaired when the anticipated undiscounted cash flow
          from the asset is separately identifiable and is less than its
          carrying value. In that event, a loss is recognized based on the
          amount by which the carrying value exceeds the fair value of the
          long-lived asset. Fair value is determined primarily using the
          anticipated cash flows discounted at a rate commensurate with the risk
          involved. Losses on long-lived assets to be disposed of are determined
          in a similar manner, except that fair values are reduced for the cost
          to dispose. During 2000, 1999 and 1998, no such impairment losses have
          been identified by the Company, other than that identified as part of
          the 2000 provision for loss on disposal of the Company's discontinued
          Structural Core Materials business segment (see Note 3).


                                       33
<PAGE>

     Foreign Currency Translation

          The local currency has been used as the functional currency in the
          country in which the Company conducts business outside of the United
          States. The assets and liabilities denominated in a foreign currency
          are translated into U.S. dollars at the current rate of exchange at
          the balance sheet date and revenues and expenses are translated at the
          average monthly exchange rates. The translation gains and losses are
          included as a separate component of other comprehensive income (loss).
          Transaction gains and losses included in results of operations are not
          material.

     Comprehensive Income (Loss)

          The Company applies the provisions of SFAS No. 130, Reporting
          Comprehensive Income, which requires the reporting of other
          comprehensive income in addition to net income from operations. Other
          comprehensive income (loss) for the Company consists of changes to its
          additional minimum pension liability and foreign currency translation
          adjustments.

     Other Expense

          Other expense consists primarily of certain legal and other costs
          incurred in connection with the Company's governmental investigations
          relating to Alcore and a class action shareholder lawsuit (see Note
          19).


                                       34
<PAGE>

2. RESTATEMENT OF PREVIOUSLY REPORTED FINANCIAL STATEMENTS

     During January 2000, the Company learned of possible accounting and
     financial reporting irregularities at its subsidiary, Alcore, when certain
     financial records were seized in connection with a search warrant issued by
     the United States District Court - District of Maryland as part of a
     governmental investigation. Additionally, the Company has been notified of
     an investigation by the United States Securities and Exchange Commission
     regarding these matters (Note 19).

     After becoming aware of the possible irregularities, the Company engaged
     special counsel and forensic accountants to assist in its investigation of
     the possible irregularities. As a result, the Company has previously
     restated its 1998 consolidated financial statements (including its
     quarterly financial statements for the first, second and third quarters of
     1999).

     Substantially all of the adjustments to restate the 1998 financial
     statements relate to operations which have been subsequently classified as
     discontinued by the Company and are contained in the restated results of
     discontinued operations in the accompanying Consolidated Financial
     Statements (see Note 3).

     Certain legal and other costs incurred by the Company during 2000 in its
     investigation of the aforementioned irregularities as well as other costs
     directly related to the aforementioned governmental investigations in the
     aggregate amount of approximately $1.3 million have been included in the
     2000 loss from discontinued operations.

3. DISCONTINUED OPERATIONS

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



                                       35
<PAGE>

     Assets and liabilities of the Structural Core Materials segment to be
     disposed of consisted of the following at December 31, 2000 and 1999 (in
     thousands):

<TABLE>
<CAPTION>
                                                               2000           1999
                                                             --------       --------
<S>                                                          <C>            <C>
               Cash                                          $     68       $     --

               Accounts receivable                              2,764          2,699

               Inventories                                      4,575          3,206

               Prepaid expenses                                    56             90
               Property, plant and equipment                   12,053         13,464

               Other noncurrent assets                          5,213          5,452
               Accounts payable                                (1,275)        (1,562)

               Accrued expenses                                  (456)          (450)

               Long-term debt                                  (1,146)          (802)
               Capital lease obligations                       (1,364)        (1,738)

               Reserve for loss on disposal of segment        (13,517)            --
                                                             --------       --------
                      Net assets to be disposed of           $  6,971       $ 20,359
                                                             ========       ========
</TABLE>

     Net assets to be disposed of have been separately classified in the
     accompanying Consolidated Balance Sheets, and the December 31, 1999 balance
     sheet has been restated to conform with the current year's presentation.

     Operating results of the Structural Core Materials segment for all periods
     reported are shown separately as results from discontinued operations in
     the accompanying Consolidated Financial Statements. Net revenues of the
     Structural Core Materials segment were approximately $23.2 million, $19.4
     million and $21.8 million for the years ended December 31, 2000, 1999 and
     1998, respectively. These amounts are not included in revenues in the
     accompanying Consolidated Statements of Operations.


                                       36
<PAGE>

Discontinued operation results, including income tax impact, are summarized as
follows for the years ended December 31, 2000, 1999 and 1998 (in thousands):

<TABLE>
<CAPTION>
                                                                                                 2000          1999          1998
                                                                                               --------      --------      --------
<S>                                                                                            <C>           <C>           <C>
Loss from operations of segment to be disposed:

      Loss before taxes                                                                        $ (3,775)     $(13,142)     $ (1,236)

      Income tax benefit                                                                          1,453         4,504           476
                                                                                               --------      --------      --------
      Loss after tax                                                                           $ (2,322)     $ (8,638)     $   (760)
                                                                                               ========      ========      ========

Provision for loss on disposal of business segment:

       Operating losses during the phase-out period:
                Loss before taxes:
                        Incurred as of end of year                                             $ (2,294)     $     --      $     --
                        Estimated future operating losses through date of disposal               (1,300)           --            --
                                                                                               --------      --------      --------
            Total operating losses during the phase-out period                                   (3,594)           --            --
                Income tax benefit                                                                1,222            --            --
                                                                                               --------      --------      --------
                Loss after tax                                                                   (2,372)           --            --
                                                                                               --------      --------      --------

       Estimated loss on disposal of business segment:
                Loss before taxes                                                               (12,217)           --            --
                Income tax benefit                                                                2,198            --            --
                                                                                               --------      --------      --------
                Loss after tax                                                                  (10,019)           --            --
                                                                                               --------      --------      --------

       Total provision for loss on disposal of business segment:
                Loss before taxes                                                               (15,811)           --            --
                Income tax benefit                                                                3,420            --            --
                                                                                               --------      --------      --------
                Loss after tax                                                                  (12,391)           --            --
                                                                                               --------      --------      --------

Total loss from discontinued operations:

      Loss before taxes                                                                         (19,586)      (13,142)       (1,236)

      Income tax benefit                                                                          4,873         4,504           476
                                                                                               --------      --------      --------
      Loss after tax                                                                           $(14,713)     $ (8,638)     $   (760)
                                                                                               ========      ========      ========

Loss per share:

   Basic:
          Loss from operations of segment to be disposed                                       $  (0.44)     $  (1.63)        (0.15)
          Estimated loss on disposal of business segment                                          (2.32)           --            --
                                                                                               --------      --------      --------
            Total loss from discontinued operations                                            $  (2.76)     $  (1.63)     $  (0.15)
                                                                                               ========      ========      ========

   Diluted:
          Loss from operations of segment to be disposed                                       $  (0.42)     $  (1.57)     $  (0.14)
          Estimated loss on disposal of business segment                                          (2.24)           --            --
                                                                                               --------      --------      --------
            Total loss from discontinued operations                                            $  (2.66)     $  (1.57)     $  (0.14)
                                                                                               ========      ========      ========
</TABLE>

Discontinued operation results include general interest expense allocations of
approximately $933,000, $984,000 and $741,000 for the years ended December 31,
2000, 1999 and 1998, respectively.


                                       37
<PAGE>

4. ACQUISITION

     On May 29, 1998, the Company acquired all of the capital stock of
     Brigantine S.A., a manufacturer of honeycomb products and engineered panels
     located in France. The acquired company was renamed Alcore Brigantine S.A.
     and operates as a subsidiary of Alcore. The acquisition was accounted for
     as a purchase and the total purchase price of $3,329,000 consisted of (1)
     $2,502,000 cash paid to the seller, (2) $500,000 in deferred payments
     evidenced by a note payable and (3) $327,000 of direct transaction costs.
     As a result of the transaction, the Company recorded $2,307,000 of
     goodwill, which was being amortized using the straight-line method over 40
     years. The Company's consolidated financial statements include the
     operating results for Alcore Brigantine S.A. since the date of the
     acquisition. The pro forma results of operations for 1998, assuming the
     acquisition had been made at the beginning of that year, would not be
     materially different from reported results.

     Alcore Brigantine S.A. is part of the Company's discontinued Structural
     Core Materials business segment, and is being accounted for as a
     discontinued operation (see Note 3).

5. SEGMENT REPORTING AND CUSTOMER CONCENTRATION

     The Company applies the provisions of SFAS No. 131, Disclosures about
     Segments of an Enterprise and Related Information, which established
     standards for the manner in which public business enterprises report
     information about operating segments.

     The Company's operations include two reportable business segments: (1)
     Aerospace and Defense and (2) Commercial Composites. All other operating
     segments have not met the quantitative thresholds for determining
     reportable segments. A description and financial data for the segments are
     summarized below.

     Aerospace and Defense

     The Aerospace and Defense markets served by the Company primarily consist
     of the United States government (Department of Defense), which the Company
     sells to on a prime and subcontract basis, and the commercial aerospace
     market. The Company designs, develops and manufactures a wide range of
     advanced composite products, advanced electronic and electro-optical
     components and other integrated defense systems for this market segment.
     Products include radomes and composite structures for high-performance
     military and commercial aviation, lightweight relocatable shelters, rocket
     motor cases, pressure vessels, fuel tanks for military aircraft, advanced
     electronic and electro-optical components, biological and chemical warfare
     detection and protection systems, metal bonded panels and other composite
     assemblies using fibers and reinforced plastics. This reportable segment
     consists of four operating segments which have been aggregated for segment
     reporting purposes.

     Commercial Composites

     The Commercial Composites segment designs and manufactures composite parts
     and components for the automotive, oil and gas and other commercial
     industries, including fuel tanks for natural gas vehicles, accumulator
     bottles, flexible drill pipe and other products.


                                       38
<PAGE>

     Other

     The remainder of the Company's business consists of operations which have
     not met the quantitative thresholds for separate segment disclosure. Other
     consists primarily of a segment that manufactures electrical power
     switching products for specialty vehicles including recreational vehicles,
     motor homes, conversion vans, over-the-road trucks and leisure boats.

Selected financial data by business segment as of and for the years ended
December 31, 2000, 1999 and 1998 follows (in thousands):

<TABLE>
<CAPTION>
                                                            2000                  1999                  1998
                                                         ---------             ---------             ---------
<S>                                                      <C>                   <C>                   <C>
Net revenues (all from external customers)

    Aerospace and Defense                                $ 140,336             $ 133,214             $ 118,897

    Commercial Composites                                   21,668                16,663                15,856

    Other operating segments                                 8,721                 9,900                 7,864
                                                         ---------             ---------             ---------
                Total                                    $ 170,725             $ 159,777             $ 142,617
                                                         =========             =========             =========

Operating income (loss)

    Aerospace and Defense                                $  13,233             $  11,420             $  12,154

    Commercial Composites                                    6,779                 2,730                   798

    Other operating segments                                  (102)                  941                   423

    Corporate                                               (4,279)               (3,522)               (3,073)
                                                         ---------             ---------             ---------
                Total                                    $  15,631             $  11,569             $  10,302
                                                         =========             =========             =========

Identifiable assets

    Aerospace and Defense                                $  64,945             $  60,708             $  57,545

    Commercial Composites                                    9,221                 7,089                 6,877

    Other operating segments                                 2,563                 3,020                 2,945

    Corporate                                               14,606                10,822                 9,988
                                                         ---------             ---------             ---------
                Total                                    $  91,335             $  81,639             $  77,355
                                                         =========             =========             =========

Capital expenditures

    Aerospace and Defense                                $     782             $   2,556             $   4,222

    Commercial Composites                                      204                   155                 1,336

    Other operating segments                                    34                   207                    44

    Corporate                                                   --                   100                    31
                                                         ---------             ---------             ---------
                Total                                    $   1,020             $   3,018             $   5,633
                                                         =========             =========             =========

Depreciation and amortization

    Aerospace and Defense                                $   2,285             $   2,466             $   1,703

    Commercial Composites                                      324                   289                   177

    Other operating segments                                   156                   144                   157

    Corporate                                                  141                    97                    68
                                                         ---------             ---------             ---------
                Total                                    $   2,906             $   2,996             $   2,105
                                                         =========             =========             =========
</TABLE>


                                       39
<PAGE>

     The following table presents the geographic location of the customer for
     revenues as of and for the years ended December 31, 2000, 1999 and 1998 (in
     thousands):

                                     2000         1999         1998
                                   --------     --------     --------
           United States           $151,979     $146,374     $127,529
           Foreign countries         18,746       13,403       15,088
                                   --------     --------     --------
              Total                $170,725     $159,777     $142,617
                                   ========     ========     ========

     Major Customer Information

     Revenues from the U.S. government on a prime or sub-contract basis during
     2000, 1999, and 1998 were approximately 69% of total revenues for each year
     reported. Approximately 19%, 16% and 14% of total revenues for 2000, 1999
     and 1998, respectively, were from The Boeing Company. No other customers
     comprised 10% or more of total revenues for the periods reported. All of
     the revenues from the U.S. government and The Boeing Company reported were
     included as part of the Aerospace and Defense business segment. More than
     92% of total revenues were on a fixed-price basis for all periods reported.

     As a government contractor, the Company is exposed to certain inherent
     industry risks and uncertainties including technological obsolescence,
     changes in government policies, dependence on the federal defense budget
     and annual congressional appropriation and allotment of funds. Although the
     Company's major programs have been well supported during recent years,
     future spending reductions and funding limitations could negatively impact
     future operations.

6. INVENTORIES

     Inventories at December 31, 2000 and 1999 consisted of the following (in
     thousands):

                                              2000            1999
                                            --------        --------
           Finished goods                   $  1,281        $  1,433
           Work in process                    29,555          28,157
           Raw materials                      13,560          16,902
           Progress payments                  (1,654)         (4,916)
                                            --------        --------
                 Total                      $ 42,742        $ 41,576
                                            ========        ========

     Work in process includes costs on major long-term aerospace and defense
     programs which are in the early stages of performance and have experienced
     actual costs to date in excess of the estimated average cost of all units
     to be produced as determined under the learning curve concept. Such costs
     included in work in process were approximately $14.2 million and $12.1
     million at December 31, 2000 and 1999, respectively. The Company has
     assumed additional orders beyond those currently included in firm released
     backlog in its estimates of average unit cost of all units to be produced.
     Recovery of the deferred production costs is dependent on the number of
     units ultimately sold, actual selling prices and associated future
     production costs. Sales significantly under estimates or costs
     significantly over estimates could result in the realization of substantial
     program


                                       40
<PAGE>

     losses in future years. Included in the $14.2 million of work in process at
     December 31, 2000 related to these contracts is approximately $4.0 million
     of costs associated with outstanding claims, the recovery of which is
     dependent on future negotiation and settlement. Of the remaining $10.2
     million of deferred production costs relating to these contracts, $8.5
     million would not be absorbed in cost of sales based on existing firm
     orders at December 31, 2000.

7. LEASES

     The Company has various lease agreements for offices, factories and
     equipment. The longest lease obligation extends to 2013. Most leases
     contain renewal options and some contain purchase options. No leases
     contain restrictions on the Company's activities concerning dividends,
     further leasing or additional debt.

     The Company is obligated under various capital leases for certain machinery
     and equipment that expire at various dates through 2002. The gross amount
     of machinery and equipment and related accumulated amortization recorded
     under capital leases as of December 31, 2000 and 1999 were as follows (in
     thousands):

                                                       2000        1999
                                                      -----       -----
            Machinery and equipment                   $ 182       $ 268
            Less accumulated amortization               (98)        (93)
                                                      -----       -----
                      Net capital lease assets        $  84       $ 175
                                                      =====       =====

     Future minimum rental payments at December 31, 2000 under agreements
     classified as operating leases with noncancelable terms in excess of one
     year, and the present value of future minimum capital lease payments are as
     follows (in thousands):

                                                     Capital     Operating
                                                     Leases        Leases
                                                     ------        ------
         Year ending December 31:
          2001                                        $ 47        $ 1,231
          2002                                          32          1,079
          2003                                          --            879
          2004                                          --            652
          2005                                          --            271
          Beyond 2005                                   --          1,545
                                                      ----        -------
          Total minimum lease payments                  79        $ 5,657
                                                      ====        =======

          Less amounts representing interest            (8)
                                                      ----
          Net principal portion                         71
          Less portion due within one year             (41)
                                                      ----

          Long-term portion                           $ 30
                                                      ====

     The schedule of operating lease obligations excludes the Company's
     obligation of $1,598,000 for the remaining five years and three months on a
     lease of a manufacturing facility located in Jessup, Maryland which is no
     longer being used by ATP in its


                                       41
<PAGE>

     operations. As of December 31, 2000, the Company has subleased
     substantially all of the Jessup facility. Management has estimated the
     amount of remaining lease obligation costs in excess of anticipated future
     sublease income to be $334,000 at December 31, 2000, and a liability of the
     same amount is included as an accrued expense on the Company's Consolidated
     Balance Sheet at December 31, 2000.

     Rent expense for the years ended December 31, 2000, 1999 and 1998 consisted
     of the following (in thousands):

                                      2000         1999         1998
                                    -------      -------      -------

            Basic expense           $ 1,686      $ 1,535      $ 1,437
            Sublease income            (254)        (254)        (253)
                                    -------      -------      -------
            Rent expense, net       $ 1,432      $ 1,281      $ 1,184
                                    =======      =======      =======

8. DEBT

     Short-term debt of the Company at December 31 consisted of the following
     (in thousands):

<TABLE>
<CAPTION>
                                                                         2000           1999
                                                                        -------       -------
<S>                                                                     <C>           <C>
            Revolving loans                                             $21,799       $21,653
            Current maturities of long-term debt                          5,698         6,228
                                                                        -------       -------
                         Total                                          $27,497       $27,881
                                                                        =======       =======
</TABLE>

     Long-term debt of the Company at December 31 consisted of the following (in
     thousands):

<TABLE>
<CAPTION>
                                                                         2000           1999
                                                                        -------       -------
<S>                                                                     <C>           <C>
            Term loans                                                  $16,635       $19,408
            Equipment loans                                               2,448         3,288
            Subordinated debt, net of  unamortized loan
                  discount of $1,627                                      5,373            --
            Deferred obligation                                              --           334
            Bonds payable                                                 2,000         2,200
              Other long-term debt                                          612           694
                                                                        -------       -------
                        Total long-term debt                             27,068        25,924
            Less current portion                                          5,698         6,228
                                                                        -------       -------
                        Long-term debt, net of current portion          $21,370       $19,696
                                                                        =======       =======
</TABLE>

     Scheduled maturities of long-term debt are as follows (in thousands):

            2001                                                        $ 5,698
            2002                                                          3,697
            2003                                                         17,314
            2004                                                             87
            2005                                                             91
            Thereafter                                                      181
                                                                        -------
                        Total                                           $27,068
                                                                        =======

     Revolving, Term and Equipment Loans

     On October 10, 2000, the Company entered into a new financing agreement
     with its primary lender. At December 31, 2000, the Company's credit
     facility with this lending


                                       42
<PAGE>

     institution totaled $46.0 million consisting of: (1) $27.0 million of
     revolving credit against eligible receivable and inventory balances, (2) a
     $16.6 million term loan and (3) a $2.4 million capital equipment loan. As
     of December 31, 2000, the Company had approximately $3.5 million of unused
     borrowing availability on this credit facility, net of $1.7 million of
     reserves against the revolving loan borrowing base for outstanding stand-by
     letters of credit commitments ($1.4 million) and other items ($0.3
     million).

     The revolving, term and equipment loans are secured by substantially all of
     the Company's assets. The interest rates on the loans are set quarterly
     based on the Company's performance against debt-to-earnings ratios
     specified in the agreement. Interest rates can range from LIBOR (the London
     Interbank Offered Rates) plus 2.75% to LIBOR plus 1.0% on the revolving
     loan and from LIBOR plus 3.25% to LIBOR plus 1.5% on the term and equipment
     loans. Alternatively, the Company may elect interest rates based on the
     lending institution's prime rate with rates on the revolving loan ranging
     from prime plus 0.5% to prime plus 0.25% and rates on the term and
     equipment loans ranging from prime plus 0.75% to prime plus 0.50%. The
     weighted average interest rates in effect at December 31, 2000 and 1999 for
     the revolving, term and equipment loans were as follows:

                                            2000         1999
                                            ----         ----
              Revolving loans               9.53%        8.50%
              Term loans                    9.91%        9.00%
              Equipment loans               9.94%        9.00%

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

     The Company is subject to several financial and nonfinancial covenants
     under the credit facility. At December 31, 2000, the Company was in
     violation of certain financial covenants. Such violations were cured as a
     result of an amendment to the agreement dated March 30, 2001.

     Subordinated Debt

     On October 10, 2000, the Company entered into an agreement with a lender
     for a three year, $7,000,000 million loan in the form of a junior secured
     credit facility. The loan bears interest payable monthly in arrears at an
     annual rate of 12.5%, and an additional 2.5% of payment-in-kind interest
     that is payable at maturity. The loan matures on October 31, 2003. In
     connection with the loan, ATP also issued warrants giving the lender the
     right to purchase 320,000 shares of the Company's common stock at an
     exercise price of $4.42 per share. The warrants are exercisable at any time
     prior to the fifth anniversary of the credit facility closing.
     Alternatively, at any time after 18 months from the closing, but prior to
     the expiration of the warrants, the lender may elect to require the Company
     to repurchase each warrant for an amount equal to 10% of ATP's EBITDA
     (earnings before interest, taxes, depreciation and amortization) divided by
     320,000 (the "Put Option"). The Put Option is subject to a maximum cap of
     $1,750,000. In the event of an exercise of the Put Option resulting in a
     repurchase price of $1,000,000 or greater, the Company has the right to
     satisfy up to 50% of the obligation by issuing a promissory note to the
     lender, with principal payments amortized evenly over 18 months. In
     addition, the Company has a call right in the event that the holders of the
     warrants


                                       43
<PAGE>

     initiate a demand registration or elect to exercise their piggyback
     registration rights in accordance with the agreement. The loan is secured
     by substantially all of the Company's assets.

     The Company allocated the $7,000,000 proceeds from the loan to the
     subordinated debt ($5,250,000) and stock warrants ($1,750,000) based on
     their respective fair values. The fair value of the stock warrants is
     reflected as a debt discount and is being amortized as interest expense
     over the three year life of the debt using the interest method. The amount
     of amortization recorded as interest expense for the year ended December
     31, 2000 was $122,000. The Company has included the value assigned to the
     stock warrants in other long-term liabilities in the accompanying
     Consolidated Balance Sheet at December 31, 2000.

     The Company is subject to several financial and nonfinancial covenants
     under the loan agreement. At December 31, 2000, the Company was in
     violation of certain financial covenants. Such violations were cured as a
     result of an amendment to the agreement dated April 2, 2001.

     Bonds Payable and Other Debt

     Bonds payable result from a financing agreement with the State of Maryland
     dated May 14, 1997 to provide $2.6 million in 15 year tax-exempt industrial
     development bonds bearing interest at a variable rate adjusted weekly to
     finance the purchase of the Belcamp, Maryland honeycomb manufacturing
     facility and an adjacent 3.2 acre parcel of land. The Company has entered
     into an interest rate swap agreement with a financial institution to fix
     the interest rate on the tax exempt bonds at 5.07% through the year 2012.
     The bonds payable require annual principal payments of $220,000 for 2001
     through 2004 and $140,000 for 2005 through 2012, and are secured by a
     letter of credit agreement between the Company and a bank. On May 12, 2000,
     the letter of credit agreement was amended for a period extending to May
     15, 2001. As a condition of the amended agreement, ATP delivered collateral
     to the bank in the form of qualified investment securities as defined with
     a value of $100,000 as of the date of execution of the amendment.
     Additional collateral in $150,000 increments was delivered on or before
     each of July 1, August 1, September 1, and October 1, 2000. The Company is
     subject to several financial and nonfinancial covenants under this
     financing agreement. At December 31, 2000, the Company was in violation of
     a financial covenant. It is anticipated that the lender will waive this and
     future violations, which are expected by the Company during 2001. However,
     since such future waivers are not assured, the Company has classified the
     total amount of the bonds as current at December 31, 2000. On March 16,
     2001 the letter of credit agreement was extended to August 16, 2001.

     On July 7, 1997, in conjunction with the tax exempt bond financing, the
     Company entered into a ten-year $810,000 Maryland Industrial and Commercial
     Redevelopment Fund loan agreement with interest set at a fixed rate of 5.1%
     annually, plus a five-year $60,000 loan from Harford County, Maryland with
     interest set at a fixed rate of 5.5%. The unpaid balance of these loans are
     reported as other long-term debt and totaled $612,000 and $694,000 at
     December 31, 2000 and 1999, respectively.


                                       44
<PAGE>

9. RETIREMENT AND EMPLOYEE BENEFIT COSTS

     Defined Contribution Plans

     The Company has retirement and savings plans for substantially all of the
     Company's employees which allow participants to make contributions up to
     15% of their base pay via payroll deductions pursuant to Section 401(k) of
     the Internal Revenue Code. Under the plan, the Company may make
     discretionary matching contributions. The Company's match for the 2000 plan
     year was 50% of each participant's pretax contributions, limited to 4% of
     their salary. The cost of the employer match for 2000, 1999, and 1998 was
     $644,000, $588,000 and $545,000, respectively.

     Union employees at the Glen Cove, New York facility are covered by a
     defined contribution retirement plan, the cost of which was $27,000,
     $32,000 and $33,000 for 2000, 1999 and 1998, respectively.

     Defined Benefits Plans

     The majority of hourly union employees of the Company, other than those at
     the Glen Cove, New York facility, are covered by defined benefit pension
     plans with benefits generally based on negotiated rates and years of
     service. The Company's funding policy is to contribute annually the minimum
     required amount determined by its actuaries.

     The change in benefit obligation, change in plan assets and funded status
     of the defined benefit plans for 2000 and 1999 is summarized as follows (in
     thousands):

<TABLE>
<CAPTION>
                                                                  2000           1999
                                                                -------        -------
<S>                                                             <C>            <C>
           Change in benefit obligation:
                  Balance at beginning of year                  $ 2,832        $ 2,803
                  Service cost                                      258            359
                  Interest cost                                     246            218
                  Plan amendments                                    --              7
                  Actuarial (gain) loss                             295           (406)
                  Benefits paid                                    (171)          (149)
                                                                -------        -------
                  Balance at end of year                        $ 3,460        $ 2,832
                                                                =======        =======

          Change in plan assets:
                   Balance at beginning of year                 $ 2,087        $ 1,186
                  Actual return on plan assets                     (164)           324
                  Employer contributions                          1,065            726
                  Benefits paid                                    (171)          (149)
                                                                -------        -------
                  Balance at end of year                        $ 2,817        $ 2,087
                                                                =======        =======

          Funded status:
                  Funded status at end of year                  $  (643)       $  (745)
                  Unrecognized net actuarial (gain) loss            635            (26)
                  Unrecognized prior service cost                   799            881
                                                                -------        -------
                  Prepaid benefit cost                          $   791        $   110
                                                                =======        =======
</TABLE>


                                       45
<PAGE>

     The amounts recognized in the Consolidated Balance Sheets at December 31,
     2000 and 1999 consist of (in thousands):

                                                         2000           1999
                                                        -------       -------
          Prepaid benefit cost                          $   791       $   151
          Accrued benefit cost                               --           (41)
          Additional minimum liability                   (1,434)         (854)
          Intangible asset                                  798           816
          Accumulated other comprehensive income            636            38
                                                        -------       -------
            Prepaid benefit cost                        $   791       $   110
                                                        =======       =======

     The net periodic benefit cost of the defined benefit plans for the years
     ended December 31, 2000, 1999 and 1998 by components was as follows (in
     thousands):

                                                  2000        1999        1998
                                                 -----       -----       -----
          Service cost                           $ 258       $ 359       $ 233
          Interest cost                            246         218         180
          Expected return on plan assets          (202)       (111)        (65)
          Amortization of prior service cost        82          82          82
          Amortization of actuarial loss            --          34          24
                                                 -----       -----       -----

                  Net periodic benefit cost      $ 384       $ 582       $ 454
                                                 =====       =====       =====

     Assumptions used to measure the projected benefit obligation and the
     expected long-term rate of return on plan assets as of December 31 were as
     follows:

                                                  2000     1999     1998
                                                  ----     ----     ----
          Discount rate                           7.50%    8.00%    6.75%
          Expected return on plan assets          8.00%    8.00%    8.00%


                                       46
<PAGE>

10. SHAREHOLDERS' EQUITY

     The activity in the equity accounts for the period January 1, 1998 through
     December 31,

<TABLE>
<CAPTION>
                                                                                                    Notes     Accumulated
                                                          Common Stock     Additional             Receivable  Other Com-
                                                                            Paid-in    Retained      from     prehensive
                                                       Shares     Amount    Capital    Earnings    Officers   Income (Loss)  Total
                                                      --------   --------   --------   --------    --------    --------    --------
<S>                                                      <C>     <C>        <C>        <C>         <C>         <C>         <C>
Balance, January 1, 1998                                 5,220   $     52   $ 16,506   $ 10,376    $   (135)   $   (305)   $ 26,494

Exercise of stock options and warrants                      20       --           16       --          --          --            16
Net income                                                --         --         --        3,999        --          --         3,999
Preferred dividends declared                              --         --         --          (80)       --          --           (80)
Additional minimum pension liability                      --         --         --         --          --          (320)       (320)
                                                      --------   --------   --------   --------    --------    --------    --------
Balance, December 31, 1998                               5,240         52     16,522     14,295        (135)       (625)     30,109

Exercise of stock options and warrants                      46          1         89       --          --          --            90
Shares issued under employee stock plan                     20       --          205       --          --          --           205
Net loss                                                  --         --         --       (3,160)       --          --        (3,160)
Preferred dividends declared                              --         --         --          (80)       --          --           (80)
Additional minimum pension liability                      --         --         --         --          --           601         601
Foreign currency translation gain                         --         --         --         --          --            51          51
                                                      --------   --------   --------   --------    --------    --------    --------
Balance, December 31, 1999                               5,306         53     16,816     11,055        (135)         27      27,816

Exercise of stock options and warrants                      30       --           12       --          --          --            12
Shares issued under employee stock plan                     40          1        187       --          --          --           188
Remeasurement of stock warrants                           --         --          136       --          --          --           136
Net loss                                                  --         --         --       (7,322)       --          --        (7,322)
Preferred dividends declared                              --         --         --          (80)       --          --           (80)
Additional minimum pension liability                      --         --         --         --          --          (367)       (367)
Foreign currency translation loss                         --         --         --         --          --           (56)        (56)
                                                      --------   --------   --------   --------    --------    --------    --------
Balance, December 31, 2000                               5,376   $     54   $ 17,151   $  3,653    $   (135)   $   (396)   $ 20,327
                                                      ========   ========   ========   ========    ========    ========    ========
</TABLE>

     2000 is summarized as follows (in thousands):

     Under the 1997 Advanced Technical Products, Inc. Stock Option Plan (the
     "1997 Plan"), the Company may grant nonstatutory and incentive stock
     options to employees of the Company for the purchase of the Company's
     common stock at an exercise price equal to at least 100% of the fair market
     value as of the date of grant (110% of such fair market value if the
     optionee owns more that 10% of the combined voting power of all classes of
     stock of the Company). The Company has authorized 300,000 shares of common
     stock for the 1997 Plan. Options granted through December 31, 2000 have
     10-year terms and vest at the rate of 20% on each of the five anniversary
     dates following the year of the grant. At December 31, 2000, no options
     were available for grant under the 1997 Plan.

     On September 12, 2000, the Company adopted the 2000 Advanced Technical
     Products, Inc. Stock Option Plan (the "2000 Plan"), which provides for
     stock option grants on terms substantially the same as the 1997 Plan. The
     Company has authorized 500,000 shares of common stock for the 2000 Plan.
     Options granted through December 31, 2000 have 10-year terms and vest at
     the rate of 20% on each of the five anniversary dates


                                       47
<PAGE>

     following the year of the grant. At December 31, 2000, approximately
     302,000 options were available for grant under the 2000 Plan.

     On November 6, 1997, the Company adopted the Advanced Technical Products,
     Inc. Non-Employee Directors Stock Option Plan (the "1997 Director Plan"),
     the terms of which are the same as the 1997 Plan, except that options are
     to be granted only to non-employee members of the Company's board of
     directors. Stock options for 100,000 shares of common stock are authorized
     under this plan. Options under the plan are automatically granted and
     initial grants to purchase 7,500 shares were given to directors serving on
     November 6, 1997. In addition, newly elected directors will be granted
     7,500 shares on the date of their initial election to the board. The
     initial options vest at a rate of 33 1/3 % on each day preceding the annual
     meeting of the stockholders of the Company for the three years subsequent
     to the option grant. Continuing non-employee directors also automatically
     receive grants of options to purchase 1,000 shares immediately following
     each annual meeting of stockholders. These options vest 100% on the day
     immediately preceding the annual stockholders meeting following the grant
     date and have 10-year terms. At December 31, 2000, approximately 23,000
     options were available for grant under the 1997 Director Plan.

     On September 12, 2000, the Company adopted the 2000 Advanced Technical
     Products, Inc. Non-Employee Directors Stock Option Plan, which provides for
     stock option grants on terms substantially the same as the 1997 Director
     Plan. The Company has authorized 100,000 shares of common stock for the
     2000 Director Plan. No options were granted under this plan as of December
     31, 2000.

     A summary of stock option transactions for 2000, 1999 and 1998 follows
     (shares in thousands):

                                                                 Weighted
                                                    Stock        Average
                                                   Options       Exercise
                                                 Outstanding      Price
                                                 -----------      -----

          At December 31, 1997                       526        $  7.91

          Options granted                             10          13.61
          Options exercised                          (18)          0.88
          Options canceled                            (4)          9.84
                                                     ---

            At December 31, 1998                     514           8.26

          Options granted                              6          13.50
          Options exercised                          (46)          1.96
           Options canceled                          (11)         15.00
                                                     ---

          At December 31, 1999                       463           8.79

          Options granted                            401           3.29
          Options exercised                          (30)          0.41
          Options canceled                           (76)         12.11
                                                     ---

           At December 31, 2000                      758        $  7.68
                                                     ===        =======


                                       48
<PAGE>

     The following table summarizes information about stock options outstanding
     at December 31, 2000 (shares in thousands):

<TABLE>
<CAPTION>
                                                                      Exercisable
                                                                -----------------------

                     Number of     Weighted-      Weighted-                   Weighted-
                      Shares        Average        Average                     Average
   Range of         Subject to     Remaining      Exercise      Number of     Exercise
Exercise Prices       Option         Life          Price          Shares       Price
- ---------------     ----------     ---------      --------      ---------     ---------
<S>                    <C>         <C>             <C>             <C>        <C>
$ 0.41-$ 4.99          516         8.8 years       $ 2.65           80        $ 0.41
$ 5.00-$10.00           68         1.0 years         7.39           68          7.39
$10.01-$15.00          174         6.9 years        14.86          126         14.85
</TABLE>

     The Company accounts for these plans under APB Opinion No. 25, under which
     no compensation cost has been recognized. Had compensation cost for these
     plans been determined based on the fair value at grant date under the
     fair-value-based method in SFAS No. 123, the Company's net income (loss)
     would have been changed to the pro forma amounts indicated below (in
     thousands, except for per share amounts):

                                           2000         1999         1998
                                        ---------    ---------    ---------
     Net income (loss):
         As reported                    $  (7,322)   $  (3,160)   $   3,999
         Pro forma                         (7,618)      (3,449)       3,740

     Net income (loss) per share:
         As reported:
              Basic                     $   (1.39)   $   (0.61)   $    0.74
              Diluted                       (1.34)       (0.59)        0.71

         Pro forma:
              Basic                     $   (1.44)   $   (0.67)   $    0.69
              Diluted                       (1.39)       (0.64)        0.66

     The per share weighted average fair value of options granted in 2000, 1999
     and 1998 was $2.27, $7.60 and $7.63, respectively, as estimated using the
     Black-Scholes option-pricing model with the following assumptions:

                                                 2000       1999        1998
                                               --------    -------    -------
     Risk free interest rate                      5.77%      5.95%      5.95%
     Expected dividend yield                         0%         0%         0%
     Expected stock volatility                      50%        45%        45%
     Expected option life                      10 years    7 years    7 years


                                       49
<PAGE>

     Stock Warrants

     A summary of stock warrant transactions for 2000, 1999 and 1998 follows
     (shares are in thousands):

                                                                 Weighted
                                                    Stock        Average
                                                   Warrants      Exercise
                                                 Outstanding      Price
                                                 -----------      -----
          At December 31, 1997                        66        $  6.85
          Warrants exercised                          (2)          5.00
                                                     ---

          At December 31, 1998                        64           6.91
          Warrants expired                            (4)         15.00
                                                     ---

          At December 31, 1999                        60           6.37
          Warrants granted                           320           4.42
          Warrants expired                           (10)          5.00
                                                     ---

          At December 31, 2000                       370        $  4.72
                                                     ===        =======

     In connection with a loan agreement entered into on October 10, 2000, ATP
     issued warrants giving the lender the right to purchase 320,000 shares of
     the Company's common stock at an exercise price of $4.42 per share (see
     Note 8).

     Certain warrant agreements contain anti-dilutive provisions providing for
     certain adjustments in the exercise price and the number of shares to be
     received upon exercise in the event of subsequent sales of stock by the
     Company below the initial warrant exercise price.

     During 2000, the Company extended the expiration date of approximately
     27,000 warrants to March 31, 2001. The fair value of the warrants as
     estimated at the date of extension using the Black-Scholes option-pricing
     model was approximately $136,000. This amount was charged to general and
     administrative expense during 2000.

     Employee Stock Purchase Plan

     On October 29, 1998, the Company adopted the 1998 Advanced Technical
     Products, Inc. Employee Stock Purchase Plan to encourage substantially all
     employees of the Company to remain in its employ and to have an opportunity
     to acquire a proprietary interest in the Company. Under the plan, employees
     may elect to use payroll withholdings to acquire shares of the Company's
     common stock at a per share price reflecting fair market value at the
     beginning or end of each calendar quarter, whichever is lower. The Company
     has authorized 1,000,000 shares of common stock under the plan. The plan
     was approved by the stockholders of the Company during 1999. During 2000
     and 1999, approximately 40,000 shares and 20,000 shares, respectively, were
     issued under the plan at a weighted average price of $4.75 for 2000 and
     $9.96 for 1999. No shares were issued under the plan prior to 1999.


                                       50
<PAGE>

     Stockholder Rights Plan

     On March 3, 2000, the Company adopted a stockholder rights plan to assist
     ATP's stockholders in realizing fair value and equal treatment in the event
     of any attempted unsolicited takeover of the Company and to protect the
     Company and its stockholders against coercive takeover tactics. Under the
     plan, a dividend of one preferred stock purchase right was declared for
     each share of common stock outstanding at the close of business on the
     record date, March 10, 2000. No separate certificates evidencing the rights
     will be issued unless and until they become exercisable. The rights
     generally will not become exercisable until a person or group acquires 15
     percent or more of ATP common stock in a transaction that is not approved
     in advance by the board of directors. In that event, each right will
     entitle the holder, other than the unapproved acquirer and its affiliates,
     to acquire, by payment of the then-applicable exercise price, initially
     $38, subject to adjustment, shares of ATP common stock with a market value
     equal to two times the exercise price. In addition, if the rights were
     triggered by such a non-approved attempted acquisition and ATP were
     thereafter to be acquired in a merger in which all stockholders were not
     treated alike, stockholders with unexercised rights, other than the
     unapproved acquirer and its affiliates, would be entitled to purchase
     common stock of the acquirer with a value of twice the exercise price of
     the rights.

11. MANDATORILY REDEEMABLE PREFERRED STOCK

     The Company has 1,000,000 shares of 8% cumulative and mandatorily
     redeemable preferred stock outstanding at December 31, 2000 and 1999. In
     case of liquidation, the holders of preferred stock will be paid out of the
     assets of the Company in cash equal to $1.00 per share, plus any
     accumulated and unpaid dividends, before the common stockholders.

     The Company may, at its option, redeem any or all of the outstanding shares
     of the preferred stock for cash equal to $1.00 per share, plus any
     accumulated and unpaid dividends. The preferred shares are subject to
     mandatory redemption at the above-stated value on the earlier of April 28,
     2001 or the date on which occurs a change in the ownership of 50% or more
     of the assets or the common stock of the Company.

12. RELATED-PARTY TRANSACTIONS

     At December 31, 2000 and 1999, certain officers of the Company have
     outstanding promissory notes in the aggregate amount of $134,865, which
     were issued to the Company as consideration for the paid-in capital in
     excess of par value for the shares of stock they own. Common shares of the
     Company owned by each employee have been pledged as collateral to secure
     the payment of the promissory notes. The notes carry an interest rate of
     the lesser of 8% and the highest rate permitted by applicable law.
     Principal and accrued interest payments are due in full upon maker's sale
     of any pledged stock or on April 28, 2001, if earlier. The notes may be
     repaid at any time at the option of the maker without penalty.

     A director of the Company is also a managing director of Allen & Company,
     Inc. ("Allen"), which rendered financial consulting services to the Company
     in 1999,


                                       51
<PAGE>

     including the preparation of a fairness opinion in connection with a
     proposed merger of ATP. The Company paid Allen $100,000 in 2000 and
     $150,000 in 1999 for financial consulting fees rendered.

13. TECHNOLOGICAL EXPENDITURES

     Technological expenditures, excluding reimbursed projects, for the years
     ended December 31, 2000, 1999 and 1998 consisted of the following (in
     thousands):

                                                2000     1999     1998
                                                ----     ----     ----

          Research and development              $208     $417     $558
          Engineering and other                   77      370      138
                                                ----     ----     ----
                      Total                     $285     $787     $696
                                                ====     ====     ====

     The Company was also reimbursed $13.3 million, $13.8 million and $11.3
     million under federally funded research and development contracts during
     the years ended December 31, 2000, 1999 and 1998, respectively.

14. INCOME TAXES

     The combined provision for U.S. federal and state income taxes allocated to
     income from continuing operations for the years ended December 31, 2000,
     1999 and 1998 consisted of the following (in thousands):

                                          2000       1999       1998
                                        -------    -------    -------

          Current                       $ 5,823    $ 5,717    $ 2,996
          Deferred                       (1,195)    (2,287)       (17)
                                        -------    -------    -------
          Total income tax expense      $ 4,628    $ 3,430    $ 2,979
                                        =======    =======    =======

     The federal statutory tax rate for the years ended December 31, 2000, 1999
     and 1998 is reconciled to the effective tax rate as follows:

                                                    2000    1999    1998
                                                    ----    ----    ----

          Federal statutory rate                    34.0%   34.0%   34.0%
          State and local taxes, net
            of federal effect                        3.7     3.7     3.7
          Other, net                                 0.8     0.8     0.8
                                                    ----    ----    ----

          Effective tax rate                        38.5%   38.5%   38.5%
                                                    ====    ====    ====


                                       52
<PAGE>

     The tax effects of temporary differences that give rise to significant
     portions of the deferred tax assets and liabilities at December 31, 2000
     and 1999 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                      2000        1999
                                                                    --------    --------
<S>                                                                 <C>         <C>
           Deferred tax assets-
              Excess of tax over book capitalized inventory costs   $    355    $    347
              Reserves not deductible until paid                       2,819       3,321
              Allowance for doubtful accounts                            175         208
              Estimated loss on disposal of discontinued segment       3,670          --
              Other                                                      245          15
              Net operating loss carryforwards                         3,058       2,603
                                                                    --------    --------
                             Total deferred tax assets                10,322       6,494

          Deferred tax liabilities-
              Depreciation                                             1,925       1,155
                                                                    --------    --------

           Net deferred tax asset before valuation allowance           8,397       5,339

           Valuation allowance                                        (2,294)       (661)
                                                                    --------    --------
           Net deferred tax asset                                   $  6,103    $  4,678
                                                                    ========    ========
</TABLE>

     The Company has net operating loss carryforwards of approximately $4.7
     million which were generated from operations of the Company's Lunn and
     Alcore divisions prior to its merger with ATP. Such carryforwards may be
     applied against future taxable income and expire at varying dates between
     2002 and 2011. As a result of the merger and the subsequent ownership
     change of Lunn, the timing of the realization of the Company's net
     operating loss carryforwards is subject to Section 382 of the Internal
     Revenue Code ("Section 382"). Section 382 generally provides that, if a
     corporation undergoes an ownership change, the amount of taxable income
     that the corporation may offset with net operating loss carryforwards is
     subject to an annual limitation. The Company's estimated annual limitation
     under Section 382 is $1,020,000.

     In addition, Alcore has generated an estimated net operating loss
     carryforward of approximately $26.6 million for state income tax purposes.
     Such carryforwards may be applied against future taxable income at the
     state income tax level and expire in 2018 and 2019. Valuation allowances of
     $1,463,000 and $661,000 were established at December 31, 2000 and 1999,
     respectively, representing reserves for the state income tax effect for all
     of the net deferred tax assets generated from the Alcore losses. A
     valuation allowance of $831,000 was established at December 31, 2000 for
     the estimated portion of the loss on disposal of discontinued business
     segment which may not be currently deductible in the year of disposal.

     In assessing the realizability of deferred tax assets, management considers
     whether it is more likely than not that some portion or all of the deferred
     tax assets will not be realized. The ultimate realization of deferred tax
     assets is dependent upon the generation of future taxable income during the
     periods in which those temporary differences become deductible. Management
     considers the scheduled reversal of deferred tax assets and liabilities,
     projected future taxable income and tax planning strategies in making this
     assessment. As of December 31, 2000, it is management's assessment that it
     is more likely than not that the Company will realize the benefits of all
     the deductible differences recorded at that date, with the exception of the
     potential tax benefits at the state income


                                       53
<PAGE>

     tax level of the Alcore net operating loss carryforward and for certain of
     the costs included in the loss on disposal of discontinued segment.

15. EARNINGS (LOSS) PER SHARE

Earnings (loss) per share are calculated as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                2000           1999           1998
                                                                              --------       --------       --------
<S>                                                                           <C>            <C>            <C>
     Income from continuing operations                                        $  7,391       $  5,478       $  4,759
     Less:  preferred stock dividends accrued                                      (80)           (80)           (80)
                                                                              --------       --------       --------
     Income from continuing operations available
          for common shares                                                   $  7,311       $  5,398       $  4,679
                                                                              ========       ========       ========

     Loss from discontinued operations                                        $(14,713)      $ (8,638)      $   (760)
                                                                              ========       ========       ========

     Net income (loss)                                                        $ (7,322)      $ (3,160)      $  3,999
     Less:  preferred stock dividends accrued                                      (80)           (80)           (80)
                                                                              --------       --------       --------
     Net income (loss) available for common shares                            $ (7,402)      $ (3,240)      $  3,919
                                                                              ========       ========       ========

     Weighted average number of common shares outstanding:
                     --Basic                                                     5,338          5,273          5,271
                       Add: assumed stock conversions, net of
                       assumed treasury stock purchases:
                          --stock options                                          166            195            220

                          --stock warrants                                          29             36             35
                                                                              --------       --------       --------
                     --Diluted                                                   5,533          5,504          5,526
                                                                              ========       ========       ========
</TABLE>

16. ACCRUED EXPENSES

     Accrued expenses at December 31, 2000 and 1999 consisted of the following
     (in thousands):

                                                            2000         1999
                                                          -------      -------

          Payroll and other compensation                  $ 6,257      $ 5,800
          Medical expenses                                  1,032        1,002
          Loss on operating lease obligation (note 7)         334          425
          Interest expense                                    463          350
          Other                                             2,443        2,196
                                                          -------      -------
                               Total                      $10,529      $ 9,773
                                                          =======      =======


                                       54
<PAGE>

17. OTHER NONCURRENT ASSETS

     Other noncurrent assets as of December 31, 2000 and 1999 are summarized as
     follows (in thousands):

<TABLE>
<CAPTION>
                                                                         2000          1999
                                                                        ------        ------
<S>                                                                     <C>           <C>
          Goodwill, net of accumulated amortization of
              $66 in 2000 and $45 in 1999                               $  767        $  788
          Intangible asset - defined benefit pension plans                 799           816
          Assets of non-qualified deferred compensation plan             1,069           839
          Other                                                            874           465
                                                                        ------        ------
                          Total                                         $3,509        $2,908
                                                                        ======        ======
</TABLE>

18. OTHER LIABILITIES

     Other long-term liabilities as of December 31, 2000 and 1999 are summarized
     as follows (in thousands):

<TABLE>
<CAPTION>
                                                                              2000             1999
                                                                             ------           ------
<S>                                                                          <C>              <C>
          Liability under stock warrant agreement (Note 8)                   $1,750           $   --
          Additional minimum pension liability                                1,434              854
          Liability under non-qualified deferred compensation plan            1,069              839
                                                                             ------           ------
                             Total                                           $4,253           $1,693
                                                                             ======           ======
</TABLE>

19. CONTINGENCIES

     On October 7, 1999, the New York Office of the Attorney General, on behalf
     of the New York State Department of Environmental Conservation ("NYSDEC"),
     sent a letter to the Company, claiming that Lunn is a potentially
     responsible party ("PRP") with respect to contamination at the Babylon
     Landfill in Babylon, New York. NYSDEC alleges that Lunn sent waste to the
     Babylon Landfill and that Lunn is jointly and severally liable under the
     Comprehensive Environmental Response, Compensation and Liability Act for
     NYSDEC's response costs in addition to interest, enforcement and future
     costs. According to NYSDEC, there are currently 13 PRPs identified for the
     Babylon Landfill. NYSDEC documents seem to indicate that Lunn did transmit
     waste to the Babylon Landfill, although it is currently unclear to what
     extent Lunn contributed to contamination of the landfill. Accordingly, the
     Company cannot at present determine the extent of its liability, if any.
     The Company has not recorded any liability for the contingency as of
     December 31, 2000.

     During January 2000, the Company was notified of an investigation by the
     United States Securities and Exchange Commission as a result of possible
     accounting and financial reporting irregularities at Alcore. The Company
     and management are cooperating fully with this investigation and the
     governmental investigation referred to in note 2. The outcome of these
     investigations are uncertain at this time.


                                       55
<PAGE>

     The Company and certain of its Officers and Directors have been named in a
     number of lawsuits filed during July 2000 in the United States District
     Court for the Northern District of Georgia. During January 2001, the
     lawsuits were consolidated and an amended complaint was filed. The lawsuit
     asserts securities fraud claims based on, among other things, alleged
     misstatements and omissions concerning the Company's 1998 and 1999
     financial results and condition, including various violations of generally
     accepted accounting principles. The lawsuit purports to be brought on
     behalf of a class consisting of all persons who purchased the Company's
     common stock in the period from April 1998 through April 2000. The Company
     intends to defend itself vigorously. It is not possible to predict the
     impact that these lawsuits may have on the Company, nor is it possible to
     predict whether any other suits or claims may arise out of these matters in
     the future. However, it is possible that the present or future lawsuits,
     and any investigations or proceedings arising out of the same or related
     facts, depending on their outcome, could have a material adverse impact on
     the Company's financial condition or results of operations in one or more
     future periods.



                                       56
<PAGE>

20. SUMMARY OF QUARTERLY INFORMATION (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                      2000  -By Quarter
                                                          -------------------------------------------------------------------------
                                                            First          Second           Third           Fourth        Total Year
                                                          ---------       ---------       ---------       ---------       ---------
                                                                             (in thousands, except per share data)
<S>                                                       <C>             <C>             <C>             <C>             <C>
Net revenues                                              $  41,359       $  44,709       $  42,089       $  42,568       $ 170,725

Operating income                                          $   3,560       $   3,335       $   4,396       $   4,340       $  15,631

Income from continuing operations                         $   1,721       $   1,565       $   2,209       $   1,896       $   7,391

Loss from discontinued operations                         $  (1,614)      $  (1,412)      $      --       $ (11,687)      $ (14,713)

Net income (loss)                                         $     107       $     153       $   2,209       $  (9,791)      $  (7,322)

Earnings (loss) per share - diluted:
       Income from continuing operations                  $    0.31       $    0.28       $    0.40       $    0.33       $    1.32
       Loss from discontinued operations                  $   (0.29)      $   (0.26)      $      --       $   (2.05)      $   (2.66)
       Net income (loss)                                  $    0.02       $    0.02       $    0.40       $   (1.72)      $   (1.34)
</TABLE>

<TABLE>
<CAPTION>
                                                                                      1999  -By Quarter
                                                          -------------------------------------------------------------------------
                                                            First          Second           Third           Fourth        Total Year
                                                          ---------       ---------       ---------       ---------       ---------
                                                                             (in thousands, except per share data)
<S>                                                       <C>             <C>             <C>             <C>             <C>
Net revenues                                              $  36,900       $  43,108       $  39,878       $  39,891       $ 159,777

Operating income                                          $   2,399       $   3,732       $   2,965       $   2,473       $  11,569

Income from continuing operations                         $   1,093       $   1,911       $   1,409       $   1,065       $   5,478

Loss from discontinued operations                         $    (907)      $  (1,398)      $  (2,337)      $  (3,996)      $  (8,638)

Net income (loss)                                         $     186       $     513       $    (928)      $  (2,931)      $  (3,160)

Earnings (loss) per share - diluted:
       Income from continuing operations                  $    0.20       $    0.34       $    0.25            0.19       $    0.98
       Loss from discontinued operations                  $   (0.17)      $   (0.25)      $   (0.42)          (0.72)      $   (1.57)
       Net income (loss)                                  $    0.03       $    0.09       $   (0.17)      $   (0.53)      $   (0.59)
</TABLE>


                                       57
<PAGE>

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

Not Applicable.


                                    PART III

ITEM 10. DIRECTORS AND OFFICERS OF THE REGISTRANT

     For information concerning directors and executive officers of the Company,
see the information set forth following the caption "ELECTION OF DIRECTORS" in
the Company's definitive proxy statement to be filed no later than 120 days
after the end of the fiscal year covered by this Form 10-K (the "Proxy
Statement"), which information is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

     The information set forth following the caption "EXECUTIVE COMPENSATION" in
the Company's Proxy Statement is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND OF MANAGEMENT

     The information set forth following the caption "ELECTION OF DIRECTORS" in
the Company's Proxy Statement is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information set forth following the caption "TRANSACTIONS WITH
DIRECTORS, OFFICERS AND AFFILIATES" in the Company's Proxy Statement is
incorporated herein by reference.


                                       58
<PAGE>

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

(a)  The following documents are filed as part of this report:

     1.   Financial Statements:

          Independent auditor's report

          Consolidated balance sheets at December 31, 2000 and 1999

          Consolidated statements of operations for the years ended December 31,
          2000, 1999 and 1998

          Consolidated statements of comprehensive income (loss) for the years
          ended December 31, 2000, 1999 and 1998

          Consolidated statements of cash flows for the years ended December 31,
          2000, 1999 and 1998

          Notes to consolidated financial statements

     2.   Financial Statement Schedules:

          None


                                       59
<PAGE>

3.   Exhibits:

Exhibit
  No.                      Description
  ---                      -----------

2.1    Agreement and Plan of Merger dated June 6, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc., as amended by Amendment to
       Agreement and Plan of Merger dated August 22, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc. (exhibits and schedules omitted)
       (incorporated by reference to Exhibit 2.1 to the Company's Current Report
       on Form 8-K dated November 14, 1997).

3.1    Amended and Restated Certificate of Incorporation of the Company
       (incorporated by reference to Exhibit 3 to the Company's Quarterly Report
       on Form 10-QSB for the period ended September 30, 1997).

3.2    Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
       Company's Quarterly Report on Form 10-QSB for the period ended September
       30, 1996).

10.1   Lease covering the Jessup, Maryland Plant (incorporated by reference to
       the Company's Annual Report on Form 10-K for the year ended December 31,
       1992).

10.2   Lease for the Company's facilities located in Glen Cove, New York dated
       January 1, 1995 between Grill Leasing Corp. and Lunn Industries, Inc.
       (incorporated by reference to Exhibit 10.12 to the Company's Quarterly
       Report on Form 10-QSB for the period ended March 31, 1995).

10.3   Amendment to the Company's 1994 Stock Incentive Plan adopted at the 1996
       Annual Shareholders Meeting on September 26, 1996 (incorporated by
       reference to Exhibit 10.1 to the Company's Quarterly Report on Form
       10-QSB for the period ended September 30, 1996).

10.4   Engagement letter dated February 21, 1996 between the Company and J.E.
       Sheehan & Co., Inc. for the placement of 3.5 million shares of the
       Company's common stock in a private placement (incorporated by reference
       to Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for
       period ended March 31, 1996).

10.5   Credit Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.26 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.6   Promissory Note dated November 15, 1996 payable to the order of First
       Union National Bank of Maryland (incorporated by reference to Exhibit
       10.27 to the Company's Annual Report on Form 10-KSB for the year ended
       December 31, 1996).

10.7   Security Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.28 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.8   Loan Agreement dated as of May 1, 1997 between Maryland Industrial
       Development Authority and Alcore, Inc. (incorporated by reference to
       Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 2,
       1997).


                                       60
<PAGE>

10.9   Trust Indenture dated as of May 1, 1997 by and among Maryland Industrial
       Development Financing Authority, First Union National Bank of Virginia
       and Branch Banking and Trust Company (incorporated by reference to
       Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 2,
       1997).

10.10  Promissory Note dated May 15, 1997 payable to Maryland Industrial
       Development Financing Authority for the sum of $2.6 million (incorporated
       by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.11  Guaranty Agreement dated May 1, 1997 made by Lunn Industries, Inc. in
       favor of First Union National Bank of North Carolina (incorporated by
       reference to Exhibit 10.4 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.12  Letter of Credit and Reimbursement Agreement by and between Alcore, Inc.
       and First Union National Bank of North Carolina dated May 1, 1997
       (incorporated by reference to Exhibit 10.5 to the Company's Current
       Report on Form 8-K dated June 2, 1997).

10.13  Security Agreement dated as of May 1, 1997 by and among Alcore, Inc.,
       Lunn Industries, Inc., First Union Bank of North Carolina, The Maryland
       Industrial Development Financing Authority and First Union National Bank
       of Maryland (incorporated by reference to Exhibit 10.2 to the Company's
       Current Report on Form 8-K dated June 2, 1997).

10.14  Loan and Security Agreement dated December 27, 1996, by and among Fleet
       Capital Corporation and Technical Products Group, Inc., Marion
       Properties, Inc., Deland Properties, Inc. and Lincoln Properties, Inc.
       (incorporated by reference to Exhibit 10.14 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.15  First Amendment to Loan and Security Agreement dated June 10, 1997, by
       and among Fleet Capital Corporation and Technical Products Group, Inc.,
       Marion Properties, Inc., Deland Properties, Inc. and Lincoln Properties,
       Inc. (incorporated by reference to Exhibit 10.15 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.16  Second Amendment to Loan and Security Agreement dated October 31, 1997,
       by and among Fleet Capital Corporation and Technical Products Group,
       Inc., Marion Properties, Inc., Deland Properties, Inc. and Lincoln
       Properties, Inc. (incorporated by reference to Exhibit 10.16 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.17  Secured Promissory Note payable to Fleet Capital Corporation executed by
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.18  Equipment Promissory Note payable to Fleet Capital Corporation executed
       by Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.19  Form of Commercial Net Building and Ground Lease of Lincoln Air Park West
       by


                                       61
<PAGE>

       and between Brunswick Corporation and Airport Authority of the City of
       Lincoln, Nebraska, together with form of Lease Extension Agreement,
       regarding various facilities of the Lincoln Composites Division located
       in Lincoln, Nebraska (incorporated by reference to Exhibit 10.19 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.20  Lease dated October 15, 1997 by and between LPR Partnership and Technical
       Products Group, Inc., through the Lincoln Composites Division, regarding
       premises located in Lincoln, Nebraska (incorporated by reference to
       Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.21* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and James S. Carter (incorporated by reference to
       Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.22* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and Garrett L. Dominy (incorporated by reference to
       Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.23* 1997 Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.24* Form of Incentive Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.25* Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.25 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.26* Form of Nonqualified Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.26 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.27* Technical Products Group, Inc. Deferred Compensation Plan (incorporated
       by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.28* Rabbi Trust Agreement executed in connection with Technical Products
       Group, Inc. Deferred Compensation Plan (incorporated by reference to
       Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.29  Lease Agreement dated January 21, 1998 by and between FRP Lakeside L.P.,
       as landlord, and Alcore, Inc., as tenant (incorporated by reference to
       Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended April 3, 1998).

10.30  Lease Agreement dated April 14, 1998 by and between Mansell Overlook 200,
       LLC, and Advanced Technical Products, Inc. (incorporated by reference to
       Exhibit 10.29


                                       62
<PAGE>

       to the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended April 3, 1998).

10.31  Amended and Restated Loan and Security Agreement dated March 31, 1998
       between Advanced Technical Products, Inc., Alcore,Inc., Technical
       Products Group, Inc., Marion Properties, Inc., Deland Properties, Inc.
       and Lincoln Properties, Inc., collectively, as borrower, and Fleet
       Capital Corporation, as lender (incorporated by reference to Exhibit
       10.31 to the Company's Quarterly Report on Form 10-Q for the quarterly
       period ended July 3, 1998).

10.32  First Amendment to Amended and Restated Loan and SecurityAgreement dated
       June 26, 1998 by and between Advanced Technical Products, Inc., Alcore,
       Inc., Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as borrower,
       and Fleet Capital Corporation, as lender (incorporated by reference to
       Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.33  Second Amended and Restated Equipment Promissory Note dated June 26,
       1998, executed by Advanced Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Properties, Inc. (incorporated by reference to
       Exhibit 10.33 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.34  Lease Agreement dated May 11, 1998 by and between George W. Hendricks and
       Barbara J. Hendricks and the Lincoln Composites Division of Advanced
       Technical Products, Inc. (incorporated by reference to Exhibit 10.34 to
       the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended October 2, 1998).

10.35  Advanced Technical Products, Inc. 1998 Employee Stock Purchase Plan dated
       October 29, 1998 (incorporated by reference to the Company's Proxy
       Statement on Form 14A dated October 1, 1999)

10.36  Agreement and Plan of Merger dated September 3, 1999 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to the Company's Proxy Statement on Form
       14A dated October 1, 1999)

10.37  Advanced Technical Products, Inc. 401 (k) Plan Adoption Agreement dated
       September 16, 1999 (filed herewith)

10.38  January 2000 Agreement and Plan of Merger dated January 28, 2000 by and
       among Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP
       Holding Corp. (incorporated by reference to Exhibit 2.1 to the Company's
       Current Report on Form 8-K dated January 28, 2000)

10.39  Termination Agreement and Plan dated January 28, 2000 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to Exhibit 2.2 to the Company's Current
       Report on Form


                                       63
<PAGE>

       8-K dated January 28, 2000) Rights Agreement dated March 3, 2000 between
       the Company and American Stock Transfer & Trust Company, as Rights Agent
       10.40 (incorporated by reference to Exhibit 4.1 to the Company's Current
       Report on Form 8-K dated March 9, 2000)

10.40  Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and Garrett L. Dominy 10.41* (filed
       herewith)

10.42* Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and James S. Carter (filed herewith)

10.43  Amendment to Letter of Credit and Reimbursement Agreement by and between
       Alcore, Inc. and First Union National Bank dated May 12, 2000 (to be
       filed by amendment)

10.44  Pledge and Security Agreement made by Alcore, Inc. to and for the benefit
       of First Union National Bank dated May 12, 2000 (to be filed by
       amendment) Second Amended and Restated Loan and Security Agreement dated
       October 10, 2000 by and among Advanced Technical Products, Inc., 10.45
       Alcore, Inc., Technical Products Group, Inc., Marion Properties, Inc.,
       Deland Properties, Inc. and Lincoln Properties, Inc., collectively, as
       borrower, and Fleet Capital Corporation, as Agent and a Lender , and
       Certain Lenders, as Lenders (filed herewith) Loan and Security Agreement
       dated October 10, 2000 by and among Back Bay Capital Funding, LLC, the
       Lender, and Advanced 10.46 Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as Borrower
       (filed herewith)

21.1   List of subsidiaries of Advanced Technical Products, Inc.

23.1   Consent of KPMG LLP.


- ----------

*    Indicates management contract or compensatory plan or arrangement.

(b)  Reports on Form 8-K:

     None


                                       64
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Roswell, State of Georgia, on March 30, 2001

ADVANCED TECHNICAL PRODUCTS, INC.


                                           /S/ JAMES P. HOBT
                                           -----------------------------
                                           James P. Hobt

                                       (a) Vice President

                                       (b) Chief Financial Officer


     Pursuant tot he requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
          Signature                                   Title                                    Date
          ---------                                   -----                                    ----
<S>                                     <C>                                               <C>

      /S/ JAMES P. HOBT       ,          Chief Financial Officer and                      March 30, 2001
- -----------------------------                      Treasurer,
        James P. Hobt                   (Principal Financial Officer and
                                          Principal Accounting Officer)


    /S/ GARRETT L. DOMINY     ,            Chief Executive Officer,                       March 30, 2001
- -----------------------------                     President
      Garrett L. Dominy                 (Principal Executive Officer)
                                                and Director


     /S/ GARY L. FORBES                     Chairman of the Board,                        March 30, 2001
- -----------------------------                   and Director
       Gary L. Forbes


     /S/ JAMES S. CARTER                           Director                               March 30, 2001
- -----------------------------
       James S. Carter


     /S/ ALAN W. BALDWIN                           Director                               March 30, 2001
- -----------------------------
       Alan W. Baldwin


    /S/ ROBERT C. SIGRIST                          Director                               March 30, 2001
- -----------------------------
      Robert C. Sigrist
</TABLE>


                                       65
<PAGE>

<TABLE>
<S>                                     <C>                                               <C>

  /S/ LAWRENCE E. WESNESKI                         Director                               March 30, 2001
- -----------------------------
    Lawrence E. Wesneski


     /S/ SAM P. DOUGLASS                           Director                               March 30, 2001
- -----------------------------
      Sam P. Douglass


      /S/ JOHN M. SIMON                            Director                               March 30, 2001
- -----------------------------
        John M. Simon


    /S/ JOHNNIE E. WILSON                          Director                               March 30, 2001
- -----------------------------
      Johnnie E. Wilson
</TABLE>


                                       66
<PAGE>

                                  EXHIBIT INDEX

Exhibit
  No.                      Description
  ---                      -----------

2.1    Agreement and Plan of Merger dated June 6, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc., as amended by Amendment to
       Agreement and Plan of Merger dated August 22, 1997 by and between Lunn
       Industries, Inc. and TPG Holdings, Inc. (exhibits and schedules omitted)
       (incorporated by reference to Exhibit 2.1 to the Company's Current Report
       on Form 8-K dated November 14, 1997).

3.1    Amended and Restated Certificate of Incorporation of the Company
       (incorporated by reference to Exhibit 3 to the Company's Quarterly Report
       on Form 10-QSB for the period ended September 30, 1997).

3.2    Bylaws of the Company (incorporated by reference to Exhibit 3.2 of the
       Company's Quarterly Report on Form 10-QSB for the period ended September
       30, 1996).

10.1   Lease covering the Jessup, Maryland Plant (incorporated by reference to
       the Company's Annual Report on Form 10-K for the year ended December 31,
       1992).

10.2   Lease for the Company's facilities located in Glen Cove, New York dated
       January 1, 1995 between Grill Leasing Corp. and Lunn Industries, Inc.
       (incorporated by reference to Exhibit 10.12 to the Company's Quarterly
       Report on Form 10-QSB for the period ended March 31, 1995).

10.3   Amendment to the Company's 1994 Stock Incentive Plan adopted at the 1996
       Annual Shareholders Meeting on September 26, 1996 (incorporated by
       reference to Exhibit 10.1 to the Company's Quarterly Report on Form
       10-QSB for the period ended September 30, 1996).

10.4   Engagement letter dated February 21, 1996 between the Company and J.E.
       Sheehan & Co., Inc. for the placement of 3.5 million shares of the
       Company's common stock in a private placement (incorporated by reference
       to Exhibit 10.1 to the Company's Quarterly Report on Form 10-QSB for
       period ended March 31, 1996).

10.5   Credit Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.26 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.6   Promissory Note dated November 15, 1996 payable to the order of First
       Union National Bank of Maryland (incorporated by reference to Exhibit
       10.27 to the Company's Annual Report on Form 10-KSB for the year ended
       December 31, 1996).

10.7   Security Agreement dated November 22, 1996 between Lunn Industries, Inc.
       and Alcore, Inc. and First Union National Bank of Maryland (incorporated
       by reference to Exhibit 10.28 to the Company's Annual Report on Form
       10-KSB for the year ended December 31, 1996).

10.8   Loan Agreement dated as of May 1, 1997 between Maryland Industrial
       Development Authority and Alcore, Inc. (incorporated by reference to
       Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 2,
       1997).

10.9   Trust Indenture dated as of May 1, 1997 by and among Maryland Industrial


                                       67
<PAGE>

       Development Financing Authority, First Union National Bank of Virginia
       and Branch Banking and Trust Company (incorporated by reference to
       Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 2,
       1997).

10.10  Promissory Note dated May 15, 1997 payable to Maryland Industrial
       Development Financing Authority for the sum of $2.6 million (incorporated
       by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.11  Guaranty Agreement dated May 1, 1997 made by Lunn Industries, Inc. in
       favor of First Union National Bank of North Carolina (incorporated by
       reference to Exhibit 10.4 to the Company's Current Report on Form 8-K
       dated June 2, 1997).

10.12  Letter of Credit and Reimbursement Agreement by and between Alcore, Inc.
       and First Union National Bank of North Carolina dated May 1, 1997
       (incorporated by reference to Exhibit 10.5 to the Company's Current
       Report on Form 8-K dated June 2, 1997).

10.13  Security Agreement dated as of May 1, 1997 by and among Alcore, Inc.,
       Lunn Industries, Inc., First Union Bank of North Carolina, The Maryland
       Industrial Development Financing Authority and First Union National Bank
       of Maryland (incorporated by reference to Exhibit 10.2 to the Company's
       Current Report on Form 8-K dated June 2, 1997).

10.14  Loan and Security Agreement dated December 27, 1996, by and among Fleet
       Capital Corporation and Technical Products Group, Inc., Marion
       Properties, Inc., Deland Properties, Inc. and Lincoln Properties, Inc.
       (incorporated by reference to Exhibit 10.14 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.15  First Amendment to Loan and Security Agreement dated June 10, 1997, by
       and among Fleet Capital Corporation and Technical Products Group, Inc.,
       Marion Properties, Inc., Deland Properties, Inc. and Lincoln Properties,
       Inc. (incorporated by reference to Exhibit 10.15 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.16  Second Amendment to Loan and Security Agreement dated October 31, 1997,
       by and among Fleet Capital Corporation and Technical Products Group,
       Inc., Marion Properties, Inc., Deland Properties, Inc. and Lincoln
       Properties, Inc. (incorporated by reference to Exhibit 10.16 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.17  Secured Promissory Note payable to Fleet Capital Corporation executed by
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.18  Equipment Promissory Note payable to Fleet Capital Corporation executed
       by Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc. (incorporated by reference
       to Exhibit 10.18 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.19  Form of Commercial Net Building and Ground Lease of Lincoln Air Park West
       by


                                       68
<PAGE>

       and between Brunswick Corporation and Airport Authority of the City of
       Lincoln, Nebraska, together with form of Lease Extension Agreement,
       regarding various facilities of the Lincoln Composites Division located
       in Lincoln, Nebraska (incorporated by reference to Exhibit 10.19 to the
       Company's Annual Report on Form 10-K for the year ended December 31,
       1997).

10.20  Lease dated October 15, 1997 by and between LPR Partnership and Technical
       Products Group, Inc., through the Lincoln Composites Division, regarding
       premises located in Lincoln, Nebraska (incorporated by reference to
       Exhibit 10.20 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.21* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and James S. Carter (incorporated by reference to
       Exhibit 10.21 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.22* Amended and Restated Employment Agreement dated November 1, 1997 by and
       between the Company and Garrett L. Dominy (incorporated by reference to
       Exhibit 10.22 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.23* 1997 Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.23 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.24* Form of Incentive Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Stock Option Plan (incorporated by
       reference to Exhibit 10.24 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.25* Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.25 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.26* Form of Nonqualified Stock Option Agreement for options granted under
       Advanced Technical Products, Inc. Non-Employee Directors Stock Option
       Plan (incorporated by reference to Exhibit 10.26 to the Company's Annual
       Report on Form 10-K for the year ended December 31, 1997).

10.27* Technical Products Group, Inc. Deferred Compensation Plan (incorporated
       by reference to Exhibit 10.27 to the Company's Annual Report on Form 10-K
       for the year ended December 31, 1997).

10.28* Rabbi Trust Agreement executed in connection with Technical Products
       Group, Inc. Deferred Compensation Plan (incorporated by reference to
       Exhibit 10.28 to the Company's Annual Report on Form 10-K for the year
       ended December 31, 1997).

10.29  Lease Agreement dated January 21, 1998 by and between FRP Lakeside L.P.,
       as landlord, and Alcore, Inc., as tenant (incorporated by reference to
       Exhibit 10.29 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended April 3, 1998).

10.30  Lease Agreement dated April 14, 1998 by and between Mansell Overlook 200,
       LLC, and Advanced Technical Products, Inc. (incorporated by reference to
       Exhibit 10.29


                                       69
<PAGE>

       to the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended April 3, 1998).

10.31  Amended and Restated Loan and Security Agreement dated March 31, 1998
       between Advanced Technical Products, Inc., Alcore,Inc., Technical
       Products Group, Inc., Marion Properties, Inc., Deland Properties, Inc.
       and Lincoln Properties, Inc., collectively, as borrower, and Fleet
       Capital Corporation, as lender (incorporated by reference to Exhibit
       10.31 to the Company's Quarterly Report on Form 10-Q for the quarterly
       period ended July 3, 1998).

10.32  First Amendment to Amended and Restated Loan and SecurityAgreement dated
       June 26, 1998 by and between Advanced Technical Products, Inc., Alcore,
       Inc., Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as borrower,
       and Fleet Capital Corporation, as lender (incorporated by reference to
       Exhibit 10.32 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.33  Second Amended and Restated Equipment Promissory Note dated June 26,
       1998, executed by Advanced Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Properties, Inc. (incorporated by reference to
       Exhibit 10.33 to the Company's Quarterly Report on Form 10-Q for the
       quarterly period ended July 3, 1998).

10.34  Lease Agreement dated May 11, 1998 by and between George W. Hendricks and
       Barbara J. Hendricks and the Lincoln Composites Division of Advanced
       Technical Products, Inc. (incorporated by reference to Exhibit 10.34 to
       the Company's Quarterly Report on Form 10-Q for the quarterly period
       ended October 2, 1998).

10.35  Advanced Technical Products, Inc. 1998 Employee Stock Purchase Plan dated
       October 29, 1998 (incorporated by reference to the Company's Proxy
       Statement on Form 14A dated October 1, 1999)

10.36  Agreement and Plan of Merger dated September 3, 1999 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to the Company's Proxy Statement on Form
       14A dated October 1, 1999)

10.37  Advanced Technical Products, Inc. 401 (k) Plan Adoption Agreement dated
       September 16, 1999 (filed herewith)

10.38  January 2000 Agreement and Plan of Merger dated January 28, 2000 by and
       among Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP
       Holding Corp. (incorporated by reference to Exhibit 2.1 to the Company's
       Current Report on Form 8-K dated January 28, 2000)

10.39  Termination Agreement and Plan dated January 28, 2000 by and among
       Advanced Technical Products, Inc., ATP Acquisition Corp. and ATP Holding
       Corp. (incorporated by reference to Exhibit 2.2 to the Company's Current
       Report on Form


                                       70
<PAGE>

       8-K dated January 28, 2000) Rights Agreement dated March 3, 2000 between
       the Company and American Stock Transfer & Trust Company, as Rights Agent
       10.40 (incorporated by reference to Exhibit 4.1 to the Company's Current
       Report on Form 8-K dated March 9, 2000)

10.40  Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and Garrett L. Dominy 10.41* (filed
       herewith)

10.42* Amendment to Amended and Restated Employment Agreement dated March 30,
       2000 by and between the Company and James S. Carter (filed herewith)

10.43  Amendment to Letter of Credit and Reimbursement Agreement by and between
       Alcore, Inc. and First Union National Bank dated May 12, 2000 (to be
       filed by amendment)

10.44  Pledge and Security Agreement made by Alcore, Inc. to and for the benefit
       of First Union National Bank dated May 12, 2000 (to be filed by
       amendment) Second Amended and Restated Loan and Security Agreement dated
       October 10, 2000 by and among Advanced Technical Products, Inc., 10.45
       Alcore, Inc., Technical Products Group, Inc., Marion Properties, Inc.,
       Deland Properties, Inc. and Lincoln Properties, Inc., collectively, as
       borrower, and Fleet Capital Corporation, as Agent and a Lender , and
       Certain Lenders, as Lenders (filed herewith) Loan and Security Agreement
       dated October 10, 2000 by and among Back Bay Capital Funding, LLC, the
       Lender, and Advanced 10.46 Technical Products, Inc., Alcore, Inc.,
       Technical Products Group, Inc., Marion Properties, Inc., Deland
       Properties, Inc. and Lincoln Properties, Inc., collectively, as Borrower
       (filed herewith)

21.1   List of subsidiaries of Advanced Technical Products, Inc.

23.1   Consent of KPMG LLP.


- ----------

*    Indicates management contract or compensatory plan or arrangement.


                                       71

