SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q


x		Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the quarterly period ended September 30, 2003 or

o		Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
		For the transition period from to

		Commission file number 1-12410

Simula, Inc.

(Exact Name of Registrant as Specified in Its Charter)


Arizona		86-0320129

(State or Other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)


7822 South 46th Street, Phoenix, Arizona		85044

(Address of Principal Executive Offices)		(Zip Code)

(602) 643-7233

(Registrant’s Telephone Number, Including Area Code)

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Indicate by check mark whether the registrant:

(1)

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

Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Exchange Act).

Yes o No x

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


Class		Outstanding at September 30, 2003

Common Stock, $.01 par value		13,153,870

TABLE OF CONTENTS


		Unaudited Consolidated Balance Sheets
		Unaudited Consolidated Statements of Operation
		Unaudited Consolidated Statements of Shareholders’ Deficit and Comprehensive Loss
		Unaudited Consolidated Statements of Cash Flows
	Item 2. Management’s Discussion and Analysis of Results of Operations and Financial Condition
	Item 3. Quantitative and Qualitative Disclosure about Market Risk
	Item 4. Controls and Procedures
PART II — OTHER INFORMATION
	Item 6. Exhibits and Reports
SIGNATURES
INDEX TO EXHIBITS
Ex-31.1
Ex-31.2
EX-32.1
EX-32.2

SIMULA, INC.

TABLE OF CONTENTS


	Page
PART I – FINANCIAL INFORMATION
Item 1 – Interim Unaudited Consolidated Financial Statements
Consolidated Unaudited Balance Sheets as of September 30, 2003 and December 31, 2002		2
Consolidated Unaudited Statements of Operations for the Three Month and Nine Month Periods Ended September 30, 2003 and 2002		3
Consolidated Unaudited Statement of Shareholders’ Deficit for the Nine Month Period Ended September 30, 2003		4
Consolidated Unaudited Statements of Cash Flows for the Nine Month Periods Ended September 30, 2003 and 2002		5
Notes to Interim Unaudited Consolidated Financial Statements		6–11
Item 2 – Management’s Discussion and Analysis of Results of Operations and Financial Condition		12–16
Item 3 – Quantitative and Qualitative Disclosure about Market Risk		17
Item 4 –Controls and Procedures		17
PART II - OTHER INFORMATION
Item 6 – Exhibits and Reports		18-19
SIGNATURES		20

SIMULA, INC. AND SUBSIDIARIES

Unaudited Consolidated Balance Sheets
September 30, 2003 and December 31, 2002


			2003			2002

ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	12,130		$	147,842
	Contract and trade receivables – Net (including costs and estimated earnings in excess of billings of $10,324,236 and $14,216,255, respectively)			19,159,489			20,446,665
	Inventories			2,491,032			3,953,837
	Prepaid expenses and other			1,199,111			1,402,252
	Current assets of discontinued operations			—			9,115,864

		Total current assets		22,861,762			35,066,460
PROPERTY, EQUIPMENT, and LEASEHOLD IMPROVEMENTS -Net				6,151,065			7,737,356
DEFERRED FINANCING COSTS				704,478			2,419,054
INTANGIBLES – Net				1,388,400			1,311,857
OTHER ASSETS				469,800			—
LONG-TERM ASSETS OF DISCONTINUED OPERATIONS				—			7,908,655

TOTAL			$	31,575,505		$	54,879,484

LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
	Revolving line of credit		$	3,542,601		$	11,283,393
	Trade accounts payable			5,010,539			3,555,552
	Other accrued liabilities			5,139,572			6,355,349
	Deferred revenue			60,000			60,000
	Accrued restructuring costs			759,077			1,140,444
	Advances on contracts			1,143,890			940,752
	Current portion of long-term debt			56,085,537			29,988,315
	Current liabilities of discontinued operations			—			6,374,093

		Total current liabilities		71,741,216			59,697,898
DEFERRED REVENUE				435,000			480,000
DEFERRED LEASE COST				1,101,150			807,156
LONG-TERM DEBT – Less current portion				228,099			32,313,087
LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS				—			9,582

		Total liabilities		73,505,465			93,307,723

SHAREHOLDERS’ DEFICIT
	Preferred stock, $.05 par value– authorized 50,000,000 shares; none outstanding
	Common stock, $.01 par value– authorized 50,000,000 shares; issued 13,153,870 and 13,014,395, respectively			131,539			130,144
	Additional paid-in-capital			63,015,447			62,715,713
	Accumulated deficit			(102,284,533	)		(97,412,354	)
	Accumulated other comprehensive loss			(2,792,413	)		(3,861,742	)

		Total shareholders’ deficit		(41,929,960	)		(38,428,239	)

TOTAL			$	31,575,505		$	54,879,484

See notes to unaudited consolidated financial statements.

SIMULA, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Operation


	Three Month Period Ended						Nine Month Period Ended
	September 30,						September 30,

	2003			2002			2003			2002

REVENUE	$	18,193,516		$	18,881,105		$	50,615,351		$	60,290,863
COST OF REVENUE		11,836,289			12,802,633			32,228,438			39,495,660

GROSS MARGIN		6,357,227			6,078,472			18,386,913			20,795,203
ADMINISTRATIVE EXPENSES		3,655,778			3,269,192			10,891,606			10,119,760
RESEARCH AND DEVELOPMENT		593,303			597,232			1,722,590			1,310,791
RESTRUCTURING CHARGES		—			762,459			598,921			762,459

OPERATING INCOME		2,108,146			1,449,589			5,173,796			8,602,193
INTEREST EXPENSE		2,520,390			2,623,171			8,277,363			7,737,789
OTHER EXPENSE (Note 7)		—			—			1,000,000			—

INCOME (LOSS) BEFORE INCOME TAXES		(412,244	)		(1,173,582	)		(4,103,567	)		864,404
INCOME TAX EXPENSE (BENEFIT)		—			(463,458	)		17,011			402,812

INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		(412,244	)		(710,124	)		(4,120,578	)		461,592
LOSS FROM DISCONTINUED OPERATIONS		(937,008)			(30,679	)		(751,601)			(319,780	)

NET INCOME (LOSS)	$	(1,349,252)		$	(740,803	)	$	(4,872,179	)	$	141,812

INCOME (LOSS) PER COMMON SHARE – Basic
INCOME(LOSS) BEFORE DISCONTINUED OPERATIONS		(0.03	)		(0.05	)		(0.32	)		0.04
LOSS FROM DISCONTINUED OPERATIONS		(0.07	)		(0.01	)		(0.05	)		(0.03	)

INCOME (LOSS) PER COMMON SHARE – Basic	$	(0.10	)	$	(0.06	)	$	(0.37	)	$	0.01

INCOME (LOSS) PER COMMON SHARE – Diluted
INCOME (LOSS) BEFORE DISCONTINUED OPERATIONS		(0.03	)		(0.05	)		(0.32	)		0.04
LOSS FROM DISCONTINUED OPERATIONS		(0.07	)		(0.01	)		(0.05	)		(0.03	)

INCOME (LOSS) PER COMMON SHARE – Diluted	$	(0.10	)	$	(0.06	)	$	(0.37	)	$	0.01

See notes to unaudited consolidated financial statements.

SIMULA, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Shareholders’ Deficit and Comprehensive Loss
Nine Months Ended September 30, 2003


										Accumulated
	Common Stock				Additional					Other			Total
					Paid-in		Accumulated			Comprehensive			Shareholders’			Comprehensive
	Shares		Amount		Capital		Deficit			Loss			Deficit			Loss

Balance, January 1, 2003		13,014,395	$	130,144	$	62,715,713	$	(97,412,354	)	$	(3,861,742	)	$	(38,428,239	)	$	—
Net loss								(4,872,179	)					(4,872,179	)		(4,872,179	)
Issuance of common shares		139,475		1,395		299,734								301,129			—
2003 currency translation adjustment								—			(814,223)			(814,223)			(814,223)
2003 currency translation adjustment write off (note 11)								—			1,883,552			1,883,552			1,883,552

Balance, September 30, 2003		13,153,870	$	131,539	$	63,015,447	$	(102,284,533	)	$	(2,792,413	)	$	(41,929,960	)	$	(3,802,850	)

See notes to unaudited consolidated financial statements.

SIMULA, INC. AND SUBSIDIARIES

Unaudited Consolidated Statements of Cash Flows
Nine Month Periods Ended September 30, 2003 and 2002


					2003			2002

CASH FLOWS FROM OPERATING ACTIVITIES:
	Net (loss) income				$	(4,872,179	)	$	141,812
	Adjustment to reconcile net (loss) income to net cash provided by operating activities:
			Loss from discontinued operations			751,601			—
			Depreciation and amortization			2,645,289			2,443,862
			Deferred income taxes			—			158,136
			Capitalized interest			1,174,937			1,139,532
			Loss on disposal of assets			155,785			—
			Restructuring charge			598,921			—
			Currency translation adjustment			—			(411,138	)
			Bad debt expense			—			391,066
			Non-cash equity compensation			—			144,525
			Write down of intangibles			99,754			—
	Changes in net assets and liabilities:
			Contract and trade receivables – net of advances			1,490,314			950,751
			Inventories			1,462,805			618,933
			Prepaid expenses and other			(40,917	)		427,993
			Other assets			113,224			21,290
			Trade accounts payable			1,454,987			719,173
			Deferred revenue			(45,000	)		(15,693	)
			Deferred lease costs			293,994			308,244
			Accrued restructuring costs			(980,288	)		797,362
			Other accrued liabilities			(2,637,194	)		(1,642,443	)
			Net assets of discontinued operations			—			(2,189,577	)

				Net cash provided by operating activities		1,666,033			4,003,828

CASH FLOWS FROM INVESTING ACTIVITIES:
			Purchase of property and equipment			(1,376,572	)		(1,185,691	)
			Costs incurred to obtain intangibles			(353,156	)		(326,003	)
			Proceeds from sale of discontinued operations, property, equipment and intangibles			14,530,349			—

				Net cash provided by (used in) investing activities		12,800,621			(1,511,694	)

CASH FLOWS FROM FINANCING ACTIVITIES:
			Net payments under line of credit			(7,740,792	)		(2,503,266	)
			Principal payments under other debt arrangements			(7,162,703	)		(136,216	)
			Issuance of common stock			301,129			210,977

				Net cash (used in) provided by financing activities		(14,602,366	)		(2,428,505	)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS						(135,712	)		63,629
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD						147,842			461,502

CASH AND CASH EQUIVALENTS, END OF PERIOD					$	12,130		$	525,131

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
		Interest Paid			$	5,346,870		$	5,109,268

		Income Taxes Paid			$	163,422		$	484,254

See notes to unaudited consolidated financial statements.

Notes to Interim Unaudited Consolidated Financial Statements

Note 1 - Basis of Presentation

The consolidated financial statements include the accounts of Simula, Inc. and its subsidiaries (collectively “we” and “our”). All of the subsidiaries are wholly-owned. All intercompany transactions are eliminated in consolidation.

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As noted in the accompanying financial statements, current maturities of debt are approximately $59.6 million as of September 30, 2003 and there is uncertainty relating to the Company’s ability to refinance certain of its debt. These factors, among others, indicate that the Company may be unable to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. As part of the plan to meet future quarterly covenants and current and long-term debt maturities, we sold our automotive safety business during July 2003 and subsequently entered into an Agreement and Plan of Merger to be acquired by Armor Holdings, Inc., a Delaware corporation (“Armor Holdings”) as discussed in Note 11 — Transactions and Subsequent Events.

As permitted by rules of the Securities and Exchange Commission for interim reporting, we have prepared the accompanying interim consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q. As permitted by these rules, certain information and notes required by GAAP for complete financial statements are condensed or omitted. In the opinion of management, all adjustments and reclassifications considered necessary for a fair and comparable presentation have been included and are of a normal recurring nature. Operating results for the three and nine-month periods ended September 30, 2003 are not necessarily indicative of the results that may be expected for the year ending December 31, 2003. Such interim financial statements should be read in conjunction with our consolidated financial statements and notes thereto included in our 2002 Form 10-K.

Certain reclassifications have been made to the financial statements for the prior periods to conform with current year's presentation.

Note 2 – Recently Issued Accounting Standards

In April 2003, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standard (“SFAS”) No. 149, “Amendment of Statement No. 133 on Derivative Instruments and Hedging Activities”, which amended and refined certain characteristics of derivative instruments and hedges. The application of SFAS No. 149 did not have a material effect on the Company’s financial statements.

In May 2003, the FASB issued a SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity”, which requires the classification of certain financial instruments, previously classified within the equity section of the balance sheet, to be included in liabilities. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003 and June 15, 2003 for all other instruments. The application of SFAS No. 150 did not have a material effect on the Company’s financial statements

In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44 and 64, amendment of FASB Statement No.13, and Technical Corrections”, which, among other things, no longer allows for the classification of gains and losses from extinguishment of debt as extraordinary. We adopted SFAS No. 145 effective January 1, 2003 and upon adoption, gains and losses on certain future debt extinguishment, if any, will be recorded in pre-tax income. In addition any previously recorded extraordinary gains or losses from early extinguishment of debt will be reclassified to income before extraordinary income or loss to conform to the requirements under SFAS 145.

In June 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities”, which addresses financial accounting and reporting for costs associated with exit or disposal activities. SFAS No. 146 also nullifies Emerging Issues Task Force (“EITF”) No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)”. SFAS No. 146 is effective for exit or disposal activities initiated after December 31, 2002. We adopted SFAS No. 146 effective January 1, 2003 and do not

anticipate that the new standard will have a material impact on our financial position or results of operations.

In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation—Transition and Disclosure”. This Statement amends SFAS No. 123 to provide alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation. We adopted the new disclosure requirements of SFAS No. 148 in 2002. We continue to account for stock-based compensation under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations.

In November 2002, the FASB issued Interpretation (“FIN”) No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others.” The interpretation requires a guarantor to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee and expands the disclosures required. Initial recognition and measurement provisions of FIN No. 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The adoption of FIN No. 45 had no effect on our financial position, results of operations or cash flows.

In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities – an Interpretation of ARB No. 51.” FIN No. 46 clarifies the consolidation requirements of variable interest entities. We have adopted the interpretation. We have no interests in any variable interest entities and, consequently, adoption of FIN No. 46 had no effect on our financial position, results of operations or cash flows.

Note 3 - Earnings per share

The following is a reconciliation of the numerators and denominators of basic and diluted per share computations. For the three month period and nine month periods ended September 30, 2003 the effect of 176,741 and 138,833 shares related to stock options were not used because the result would have been anti-dilutive. Additionally, for the three and nine month periods ended September 30, 2003 and 2002, the effect of 1,774,074 shares to be issued upon conversion of the 8% Senior Subordinated Convertible Notes was not used in determining dilutive earnings per share because the result would have been anti-dilutive.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,

	2003			2002			2003			2002

Net (loss) earnings available to common shareholders	$	(1,349,252	)	$	(740,803	)	$	(4,872,179	)	$	141,812

Basic weighted average shares outstanding		13,076,853			12,939,056			13,037,460			12,914,148
Effect of dilutive securities		—			—			—			262,727

Diluted weighted average shares outstanding		13,076,853			12,939,056			13,037,460			13,176,874

Basic per share amounts	$	(0.10	)	$	(0.06	)	$	(0.37	)	$	0.01

Diluted per share amounts	$	(0.10	)	$	(0.06	)	$	(0.37	)	$	0.01

Note 4 – Stock Based Compensation

We have three stock-based employee compensation plans. We account for those plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees”, and related Interpretations under which no compensation cost has been recognized. However, we have computed compensation cost, for pro forma disclosure purposes, based on the fair value of all options awarded on the date of grant, utilizing the Black-Scholes option pricing method. The following table illustrates the effect on net income and earnings per share if we had applied the fair value recognition

provisions of FASB Statement No. 123, “Accounting for Stock-Based Compensation”, to stock-based employee compensation for the three month and nine month periods ended September 30:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2003			2002			2003			2002

Net (loss) income – as reported	$	(1,349,252	)	$	(740,803	)	$	(4,872,179	)	$	141,812

Deduct: Total stock based employee compensation expense determined under fair value based method		(6,096	)		(60,264	)		(42,470	)		(292,895	)

Net (loss) income – pro forma	$	(1,355,348	)	$	(801,067	)	$	(4,914,649	)	$	(151,083	)

(Loss) income per share: basic and diluted as reported	$	(0.10	)	$	(0.06	)	$	(0.37	)	$	0.01

(Loss) income per share: basic and diluted – pro forma	$	(0.10	)	$	(0.06	)	$	(0.38	)	$	(0.01	)

The fair value of each option grant is estimated on the date of grant using the Black-Scholes options pricing model and the following table illustrates the assumptions used for grants for the three month and nine-month periods ended September 30:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2003			2002			2003			2002

Dividend yield	None			None			None			None
Expected volatility		116	%		96	%		116	%		98	%
Risk-free interest rate		3.6	%		3.6	%		3.6	%		3.6	%
Expected lives		3.25			3.25			3.25			3.25

Note 5 – Inventories

At September 30, 2003 and December 31, 2002, inventories consisted of the following:


		2003			2002

Raw Materials		$	2,647,830		$	3,298,676
Work in Progress			205,151			636,980
Finished Goods			—			258,181
Inventory Reserve			(361,949	)		(240,000	)

	Total Inventories	$	2,491,032		$	3,953,837

Note 6 – Property, Equipment and Leasehold Improvements

At September 30, 2003 and December 31, 2002 property, equipment and leasehold improvements consisted of the following:


		2003			2002

Land		$	—		$	816,888
Buildings and leasehold improvements			2,429,746			3,885,263
Equipment			13,552,245			13,229,244

Total			15,981,991			17,931,395
Less accumulated depreciation and amortization		(	9,860,460	)	(	10,194,039	)

	Property, equipment and leasehold improvements - net	$	6,151,065		$	7,737,356

Note 7 – Debt

On September 30, 2003, we were not in compliance with certain non-monetary financial covenants under our Revolving Line of Credit (the “RLC”) and our Senior Secured Note. On November 12, 2003, we received waivers of the non-compliance at September 30, 2003. As of June 30, 2003, we were not in compliance with a certain non-monetary financial covenant under our Senior Secured Note which, provided for a performance fee of $1.0 million. Our RLC had outstanding borrowings of $ 3.5 million and remaining borrowing availability of $ 3.5 million at September 30, 2003 as compared to outstanding borrowings of $11.3 million and a remaining borrowing availability of $1.3 million at December 31, 2002.

Note 8 – Other Intangible Assets

All of our intangible assets with finite lives ranging from 15 to 20 years were principally comprised of technology patents with a total cost at September 30, 2003 and December 31, 2002 as follows:


		2003			2002

Patents and licenses		$	1,648,910		$	1,686,456
Other			132,669			566,010

Total			1,781,579			2,252,466
Less accumulated amortization			(393,179	)		(940,609	)

	Intangibles – net	$	1,388,400		$	1,311,857

Intangible asset amortization expense for the three month periods ended September 30, 2003 and 2002 were approximately $24,000 and $51,000, respectively and $106,000 and $134,000 for the nine month periods ended September 30, 2003 and 2002, respectively. Additionally, during the nine month period ended September 30, 2003 we wrote off approximately $100,000 of intangibles. Estimated amortization expense for the five succeeding fiscal years is as follows:


2003	$	116,000
2004		100,000
2005		100,000
2006		100,000
2007		100,000

Note 9 – Research and Development

Our research and development efforts arise from funded development contracts and proprietary research and development. Amounts arising from such efforts are as follows:


		Three Months Ended						Nine Months Ended
		Sept 30,			Sept 30,			Sept 30,			Sept 30,
		2003			2002			2003			2002

Research and development expenses		$	593,303		$	597,232		$	1,722,590		$	1,310,791

Funded contracts:
	Revenue funded by customers	$	71,711		$	1,168,976		$	543,288		$	2,998,081
	Research and development expenses classified as cost of such revenue		(32,328	)		(571,227	)		(299,638	)		(1,807,629	)

Income of funded contracts		$	39,383		$	597,749		$	243,650		$	1,190,452

Note 10 - Restructuring

In December 1999, we adopted a plan of restructuring that included the divestiture of our commercial airline seat manufacturing operation. In July 2002, we adopted a plan of restructuring focused on reducing workforce to align with a newly developed strategic focus and in January 2003, we adopted a plan to restructure our Aerospace and Defense business by reducing workforce and closing our Asheville facility and consolidating those operations into our Phoenix facility. The Asheville facility was closed and all operations were moved to the Phoenix location as of March 31, 2003. We completed the sale of the Asheville facility on April 8, 2003 and retired the mortgage note payable related to that facility. At September 30, 2003, there was $759,077 of remaining restructuring liability, which principally relates to lease obligations associated with the closed airline facility, which run through May of 2008. Severance obligations as part of the 2002 and 2003 restructuring, which are expected to be fully paid by December 2004. A summary of the change in accrued restructuring is as follows:


	Facility			Other
	Closure			Contracts			Severance			Total

Balance at December 31, 2002	$	535,285		$	331,941		$	273,218		$	1,140,444
Nine Months restructuring		—			—			598,921			598,921
Reclassification of charges		294,279			(294,279	)		—			—
Cash payments		(181,061	)		(8,268	)		(790,959	)		(980,288	)

Balance at September 30, 2003	$	648,503		$	29,394		$	81,180		$	759,077

Note 11 – Transactions and Subsequent Events

On July 22, 2003, we completed the sale of all the assets of our Automotive Safety division to Zodiac, S.A. at a selling price of approximately $14.5 million in cash. Customary closing and purchase price adjustments increased the previously announced selling price by approximately $0.2 million. After deducting closing costs and related fees, we received net proceeds of approximately $12.9 million. The transaction resulted in a gain on sale of approximately $0.6 million, which includes approximately $0.3 million related to an escrow account, from which we can potentially recover a maximum of $0.5 million in 18 months from the closing of the transaction, before the impact of the one-time charge to write off accumulated foreign currency translation losses of approximately $1.9 million. We applied the net proceeds to repay a portion of our outstanding debt.

On September 2, 2003, we announced that we signed an Agreement and Plan of Merger (the “Merger Agreement”) to be acquired by Armor Holdings, Inc., a Delaware corporation (“Armor Holdings”). The Merger Agreement states that Armor Holdings shall acquire all outstanding common stock of Simula, retire outstanding indebtedness, and assume all liabilities of Simula for total consideration of $110.5 million. Consideration to Simula’s shareholders will, at Armor Holdings’ discretion, consist of cash or a combination of cash and registered shares of Armor Holdings’ common stock, with at least 20% of the value of the payment to shareholders to be in cash. The transaction is structured as a merger and is expected to be taxable to Simula’s shareholders.

Note 12 – Segment Reporting

We are a holding company for wholly-owned subsidiaries, which now operate in one primary business segment. Our Commercial segment consisted of our Automotive Safety division, which was sold as discussed in Note 11, above. Our Aerospace and Defense segment includes operations that design and manufacture crash resistant components, energy absorbing devices, and ballistic armor products, which are sold principally to branches of the United States armed forces. All other activity, included in Other, represents general corporate operations, including unallocated interest and technology sales and royalties and operations from our business derived from proprietary technology and polymer materials.

For the three-month periods ended September 30, 2003 and 2002, inter-segment sales were insignificant and total intercompany sales of $20,696 and $4,081, respectively, have been eliminated. For the three-month periods ended September 30, 2003 and 2002 sales to the branches of the United States Armed Forces were 86% and 85%, respectively of total sales.


			2003

			Aerospace and
			Defense		Other			Total

Revenue:
	Contract revenue		$	17,893,236	$	—		$	17,893,236
	Product sales:
		Other		—		58,200			58,200
	Technology sales and royalties			—		242,080			242,080

Total revenue			$	17,893,236	$	300,280		$	18,193,516

Operating income (loss)			$	3,192,493	$	(1,084,347	)	$	2,108,146


			2002

			Aerospace and
			Defense		Other			Total

Revenue:
	Contract revenue		$	18,665,971	$	—		$	18,665,971
	Product sales:
		Other		—		30,442			30,442
	Technology sales and royalties			—		184,692			184,692

Total revenue			$	18,665,971	$	215,134		$	18,881,105

Operating income (loss)			$	2,482,387	$	(1,032,798	)	$	1,449,589

For the nine-month periods ended September 30, 2003 and 2002, inter-segment sales were insignificant and total intercompany sales of $231,748 and $48,917, respectively, have been eliminated. For the nine-month periods ended September 30, 2003 and 2002 sales to the branches of the United States Armed Forces were 86% and 85%, respectively of total sales.


			2003

			Aerospace and
			Defense		Other			Total

Revenue:
	Contract revenue		$	49,832,281	$	—		$	49,832,281
	Product sales:
		Other		—		97,096			97,096
	Technology sales and royalties			—		685,974			685,974

Total revenue			$	49,832,281	$	783,070		$	50,615,351

Operating income (loss)			$	7,976,949	$	(2,803,153	)	$	5,173,796


			2002

			Aerospace and
			Defense		Other			Total

Revenue:
	Contract revenue		$	59,039,168	$	—		$	59,039,168
	Product sales:
		Other		—		214,814			214,814
	Technology sales and royalties			—		1,036,881			1,036,881

Total revenue			$	59,039,168	$	1,251,695		$	60,290,863

Operating income (loss)			$	9,868,013	$	(1,265,820	)	$	8,602,193

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

Results of Operations

Three and Nine Month Periods Ended September 30, 2003 Compared to
Three and Nine Month Periods Ended September 30, 2002

CONSOLIDATED


	Three Months Ended												Nine Months Ended
	September 30,												September 30,

										Percent												Percent
(In thousands)	2003			2002			Change			Inc (Dec)			2003			2002			Change			Inc (Dec)

Revenue	$	18,194		$	18,881		$	(687	)		(4	%)	$	50,615		$	60,291		$	(9,676	)		(16	%)
Gross margin		6,357			6,078			279			5	%		18,387			20,795			(2,408	)		(12	%)
Administrative and research and development expense		4,249			3,866			383			10	%		12,614			11,431			1,183			10	%
Operating income		2,108			1,450			658			45	%		5,174			8,602			(3,428	)		(40	%)
Interest expense, net		2,520			2,623			(103	)		(4	%)		8,277			7,738			539			7	%
Other expense		—			—			—						1,000			—			1,000			—
(Loss) income before income tax		(412	)		(1,174	)		762			65	%		(4,104	)		864			(4,968	)		(575	%)
Income tax expense (benefit)		—			(463	)		463			—			17			402			(385	)		(96	%)
Gross margin as a percentage of revenue		35	%		32	%								36	%		34	%
Administrative and research and development expenses as a percentage of revenue		23	%		20	%								25	%		19	%

AEROSPACE & DEFENSE


	Three Months Ended												Nine Months Ended
	September 30,												September 30,

										Percent												Percent
(In thousands)	2003			2002			Change			Inc (Dec)			2003			2002			Change			Inc (Dec)

Revenue	$	17,893		$	18,666		$	(773	)		(4	%)	$	49,832		$	59,039		$	(9,207	)		(16	%)
Gross margin		6,232			5,985			247			4	%		18,050			20,008			(1,958	)		(10	%)
Gross margin as a percentage of revenue		35	%		32	%								36	%		34	%

Results of Operations for the Three-Month Period Ended September 30, 2003

Revenue for the three-month period ended September 30, 2003 decreased 4% compared to revenue in the same period for 2002. Revenue for the period declined 4% in the Aerospace and Defense segment primarily due to timing of orders coupled with delays in Department of Defense funding of various programs. Small Arms Protective Inserts (“SAPI”) business continues to be robust, however, SAPI revenues were negatively impacted during the third quarter of 2003 compared to the same period in 2002 due to the timing of orders. The aforementioned decreases were partially offset by increased revenues related to our inflatable systems, fixed wing seating and rotorcraft seating. Additionally, we experienced decreases in funded engineering services and product spares.

Gross margin as a percent of sales increased to 35% for the three-month period ended September 30, 2003 from 32% for the comparable period in 2002. Gross margin as a percent of sales in our Aerospace and Defense segment increased to 35% for the three months ended September 30, 2003 from 32% for the same period in 2002. The increase was primarily due to cost savings related to the move and integration of the Asheville facility to our Phoenix location as well as the effect of cost reduction efforts completed in 2002 and early 2003. In addition in the third quarter of 2002 we were negatively impacted by increased costs of approximately $1.0 million related to voluntary rework of our SAPI plates.

Administrative and research and development expenses for the three-month period ended September 30, 2003 increased 10% as compared to the same 2002 period. During the three-month period ended September 30, 2003 we incurred and expensed approximately $0.8 million of transaction costs related to the sale of our automotive safety business and the pending merger with Armor Holdings. The aforementioned increase was partially offset by cost saving reductions in general administrative expenses related to restructuring activities that were implemented in 2002 and 2003.

Operating income for the three-month period ended September 30, 2003 was $2.1 million compared to $1.5 million for the same period in 2002. Operating income for the three-month period ended September 30, 2003 was negatively impacted by $0.8 million in transaction costs discussed above. Although revenues were down period to period we were able to capitalize on restructuring activities that were implemented in prior periods and experience the benefits the costs savings generated with the move and integration of our Asheville facility.

Interest expense decreased to $ 2.5 million for the three-month period ended September 30, 2003 compared to $2.6 for the same period in 2002. The decrease is primarily attributable to the reduction of debt through the use of proceeds from the sale of our automotive safety business. Cash paid for interest for each of the three-month periods ended September 30, 2003 and 2002 was $ 1.6 million and $ 1.7 million, respectively.

Results of Operations for the Nine-Month Period Ended September 30, 2003

Revenue for the nine-month period ended September 30, 2003 decreased 16% compared to revenue in the same period for 2002. In the first quarter of 2003, SAPI body armor revenue grew compared to the same period in 2002. However, production revenues and profitability were negatively impacted as we completed the SAPI body armor design validation for rework announced in November of 2002. We resumed full production of SAPI for the U.S. Army in late February 2003, but the design validation process caused delays in the timing of revenues anticipated related to new SAPI orders. Also in the first quarter, we completed the consolidation of our Asheville, North Carolina, operation into the larger Aerospace and Defense facility based in Phoenix. The plant closure and transition resulted in a temporary revenue shortfall. Additionally, revenues were negatively impacted by decreases in orders and cancellation of funding for some of our military sealed parachute product and were partially offset by increased production of military personnel vests and flotation collars. The aforementioned decreases were also partially offset by increases in our fixed wing seating and rotorcraft seating. Technology and licensing revenues for the nine-months ended September 30, 2003 decreased approximately 34% compared to the same period in 2002 and is primarily attributed to a strategic decision to retain all technology rights as an asset during our focused efforts on selling the entire Company.

Gross margin as a percentage of sales increased to 36% for the nine-month period ended September 30, 2003 from 34% for the comparable period in 2002. Gross margin as a percent of sales in our Aerospace and Defense segment increased to 36% for the nine-month period ended September 30, 2003 from 34% for the same period in 2002. The integration of the Asheville facility to the Phoenix location enabled us to achieve cost savings not experienced in 2002 and cost reduction efforts began in 2002 and early 2003 have been the key drivers for the increased margins. Additionally, in 2002 we began voluntary rework related to our SAPI plates and we recorded a loss of approximately $1.0 million, for projected rework costs.

Administrative and research and development expenses for the nine-month period ended September 30, 2003 increased $1.2 million or 10% as compared to the same 2002 period. During the nine-month period ended September 30, 2003 we incurred and expensed approximately $1.4 million of transaction costs related to the sale of our automotive safety business and the pending merger with Armor Holdings. Additionally, we and others in the aerospace and defense industry have experienced a shift from externally funded development to more internally funded development, which has caused research and development expenditures to increase for the nine-month period ended September 30, 2003 compared to the same period in 2002.

The aforementioned increases were partially offset by cost saving reductions in general administrative expenses related to restructuring activities that were implemented in 2002 and 2003.

Operating income for the nine-month period ended September 30, 2003 was $5.2 million as compared to $8.6 million for the same period in 2002. The 2003 operating income for the nine-month period ended September 30, 2003 was negatively impacted by lower revenues discussed above and transaction costs of $1.4 million as well as, restructuring charges, costs associated with the move of our Asheville facility, the investments in the design and qualification testing for SAPI body armor for future procurements and the completion of the voluntary SAPI rework.

Interest expense for the nine-month period ended September 30, 2003 was $8.3 million compared to $7.7 million for the same period in 2002. The increase in interest expense between the two periods is primarily attributable to approximately $0.4 million of expense related to a yield maintenance interest feature in the mortgage note for the Asheville facility that was retired in April 2003. Cash paid for interest for the nine-month period ended September 30, 2003 and 2002 was $5.3 million and $5.1 million, respectively.

Other expense for the nine-month period ended September 30, 2003 was $1.0 million and was entirely attributable to a one-time performance fee payment related to covenant non-compliance for failure to meet a leverage ratio as of June 30, 2003 under our Senior Secured Note.

Liquidity and Capital Resources

The accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As noted in the accompanying financial statements, current maturities of debt are approximately $59.6 million as of September 30, 2003 and there is uncertainty relating to the Company’s ability to refinance certain of its debt. These factors, among others, indicate that the Company may be unable to continue as a going concern. The accompanying financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. As part of the plan to meet future quarterly covenants and current and long-term debt maturities, we sold our automotive safety business during July 2003 and subsequently entered into an Agreement and Plan of Merger (the “Merger Agreement”) to be acquired by Armor Holdings, Inc., a Delaware corporation (“Armor Holdings”) as discussed in Note 11 — Transactions and Subsequent Events, to the accompanying unaudited consolidated financial statements.

Current maturities of our debt as of September 30, 2003 are $59.6 million and primarily consist of $3.5 million under our revolving line of credit (“RLC”) due December 31, 2003, $ 24.7 million of our Senior Secured Note due December 31, 2003, and $ 31.4 million of our 8% Senior Subordinated Notes due May 1, 2004. As part of the plan to meet future quarterly covenants and current and long-term debt maturities, we sold our automotive safety business during July 2003 and subsequently entered into the Merger Agreement, all as discussed below.

On July 22, 2003, we completed the sale of all the assets of our Automotive Safety division to Zodiac, S.A. at a selling price of approximately $14.5 million in cash. Customary closing and purchase price adjustments increased the previously announced selling price by approximately $0.2 million. After deducting closing costs and related fees, we received net proceeds of approximately $12.9 million. The transaction, which is classified in discontinued operations, resulted in a gain on sale of approximately $0.6 million, which includes approximately $0.3 million related to an escrow account, from which we can potentially recover a maximum of $0.5 million in 18 months from the closing of the transaction, before the impact of the one-time charge to write off accumulated foreign currency translation losses of approximately $1.9 million. We applied the net proceeds to repay a portion of our outstanding debt.

On September 30, 2003, we were not in compliance with certain non-monetary financial covenants under our Revolving Line of Credit (the “RLC”) and our senior secured note. On November 12, 2003, we received waivers of the non-compliance at September 30, 2003. Our RLC had outstanding borrowings of $ 3.5 million and remaining borrowing availability of $ 3.5 million at September 30, 2003 as compared to outstanding borrowings of $11.3 million and a remaining borrowing availability of $1.3 million at December 31, 2002.

Because of our management and operational re-alignment and our operational profitability, we expect to generate future positive operating cash flows that, together with our existing availability under our RLC, will be adequate to fund our planned operations, excluding the principal payments on the current debt previously discussed.

We continually review our revenue and cost forecasts so that we can react to changes in our operations and liquidity position. The amount and timing of Department of Defense procurement and future constraints on certain raw materials and their costs could impact our ability to generate Aerospace and Defense revenue and income. See “Forward-Looking Information and Risks and Uncertainties in our Business” below and “Quantitative and Qualitative Disclosure about Market Risk” included Item 3 of this Part I

Our ability to generate sufficient cash flow from operations is principally dependent upon our ability to continue to increase revenue and contain or reduce operating expenses. At September 30, 2003, we had cash and cash equivalents of $12,130 compared to $147,842 at December 31, 2002. Our RLC had outstanding borrowings of $3.5 million and remaining borrowing availability of $3.5 million at September 30, 2003 as compared to outstanding borrowings of $11.3 million and a remaining borrowing availability of $1.3 million at December 31, 2002. At November 5, 2003 our outstanding borrowings under the RLC was $2.3 million and remaining borrowing availability was $5.6 million. Because of our federal and certain state net operating loss carryforwards, we are not a significant cash taxpayer.

Operating activities provided approximately $1.7 million of cash during the nine-month period ended September 30, 2003 as compared to approximately $4.0 million for the comparable period in 2002. The decrease in cash provided by operations was attributable primarily to lower results of operations for the nine month period due to the one time performance fee for a covenant violation, loss on the sale of our automotive safety business and transaction costs, previously discussed.

Investing activities provided $12.8 million during the nine-month period ended September 30, 2003 compared to a use of approximately $1.5 million for the same period in 2002. The increase in cash provided by investing activities is related to the completion of the sale of our automotive safety business, of the Asheville facility and of land. The cash provided by investing activities was partially offset by the purchase of manufacturing equipment and additional investment in our patent portfolio.

Financing activities used net cash of $14.6 million for the nine-month period ended September 30, 2003, compared to $ 2.4 million provided by financing activities for the same period in 2002. Cash used in financing activities during the nine-month period ended September 30, 2003 was attributable to the retirement of our 9.5% Senior Subordinated Notes, the retirement of the Asheville facility mortgage note payable, payments made to our RLC and our Senior Secured Note from the proceeds of the sale of our automotive safety business and decreased borrowings under our RLC.

We believe we have sufficient manufacturing capacity, at September 30, 2003, to meet our anticipated future delivery requirements. We may, however, seek strategic partners for the joint development of capital intensive manufacturing capacity for new high technology products.

Research and Development

Historically, we have made significant investments in research and development. Our research and development expenditures have fluctuated based on available government-funded contracts and available company funding. We anticipate that future fluctuations will continue as a result of our efforts to expand product lines and enhance our existing technologies.

Forward Looking Information and Risks and Uncertainties in our Business

A wide variety of factors affect our projected operating and financial results and can adversely impact our revenues, profitability and cash flows. Our liquidity and available working capital depend upon our cash flow from operations and, will require proceeds from asset sales or licensing, refinancing of our debt, or potential sale or merger of Simula. Improved cash flow from operations will depend on our ability to continue to implement our cost cutting initiatives. Continued compliance with our debt covenants is necessary to avoid loan defaults and is a requirement for maintaining access to funds available under our RLC.

With respect to our product offerings many of our products are subassemblies in final products. We act as subcontractor to defense industry prime contractors. Accordingly, we are reliant on others to gain and retain market acceptance for our products, and we must continue to demonstrate that our products will provide advantages to the manufacturers of final products, including increasing product safety and providing such manufacturers with competitive cost advantages

Although we have long established relationships with a number of our Aerospace and Defense customers, we do not have significant long-term supply contracts with any of these customers. Our customers typically do not commit to long-term production schedules and, as a result, customer orders generally are subject to cancellation or delay. Reliance upon defense contracts involves certain risks, including dependence on congressional appropriations and changes in governmental policies that reflect military and political developments.

Factors pertinent to our ability to meet our current and future financial requirements and projections include:

•		our ability to complete the pending acquisition by Armor Holdings, Inc.;

•		our relationship with our senior lenders and on-going compliance with loan terms and covenants;

•		our relationship with significant customers and maintenance of preferred supplier relationships that are renegotiated frequently;

•		our leveraged status and the level and cost of our debt;

•		the continued reduction of our fixed expenses;

•		ability to monetize assets including through sales of certain assets or technologies at a favorable price;

•		our ability to continue to provide design and manufacturing services, products and new product applications that compare favorably on the basis of time to introduction, cost, and performance with those of our competitors;

•		the level and makeup of military expenditures;

•		contract mix and shifting production and delivery schedules among our market segments;

•		the amount of resources available for independent research and development;

•		proof of concept and production validation of certain of our new technologies and proposed products, as well as our financial ability to establish manufacturing capacity for such products; and

•		technological changes introduced by competitors and customers.

As used throughout this report, the words “estimate,” “anticipate,” “expect,” “should,” “intend,” “project,” “target,” or other expressions that indicate future events identify forward-looking statements which are made pursuant to safe harbor provisions of the Private Securities Litigation Reform Act of 1995. We undertake no obligation to update any of these forward-looking statements to reflect events or circumstances after the date on which such statements were made or to reflect the occurrence of unanticipated events. Actual results and trends may differ materially. Risks include those described herein

and in our registration statements and periodic reports filed with the U.S. Securities and Exchange Commission.

Item 3. Quantitative and Qualitative Disclosure about Market Risk

Currency Exchange Rate Risk

We have currency exposures related to buying and selling in currencies other than the local currency in which we operate. These exposures may impact future earnings and/or operating cash flows. Currently, our most significant exposure relates to the Euro and the British Pound. We had supply contracts that are Euro denominated for our ITS® and AHPS products. We maintained a manufacturing facility in the United Kingdom for which we funded operating expenses in British Pounds. We entered into foreign currency hedge transactions to mitigate our associated risks. The magnitude of the exposure varied over time and we entered into agreements from time to time by which we sought to manage certain portions of our foreign exchange exposure in accordance with established policy guidelines. These arrangements primarily hedged cash flows for forecasted transactions involving receivables and payables. We currently have no hedging contracts open as of September 30, 2003, and we disposed of our U.K. manufacturing facility when we sold our automotive safety business on July 22, 2003.

Item 4. Controls and Procedures

We evaluated, under the supervision and with the participation of management, including the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO), the effectiveness of the design and operation of our disclosure controls and procedures as of September 30, 2003 pursuant to Rule 15d-14 under the Securities Exchange Act of 1934 (Exchange Act). Based upon that evaluation, the CEO and CFO concluded that Simula’s disclosure controls and procedures are effective to ensure that information required to be disclosed in Simula’s reports filed or submitted under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

During the quarterly period covered by this report, there were no significant changes in our internal controls or in other factors that could significantly affect the disclosure controls.

PART II – OTHER INFORMATION

Item 6. Exhibits and Reports

(a) Exhibits: The following Exhibits are included pursuant to Item 601 of Regulation S-K.


No.	Description	Reference
3.1	Articles of Incorporation of Simula, Inc., as amended and restated		(2	)

3.2	Bylaws of Simula, Inc., as amended and restated		(1	)

4.7	Indenture dated April 1, 1997, in connection with the Company’s issuance of the 8% Senior Subordinated Convertible Notes due May 1, 2004		(6	)

10.11	1992 Stock Option Plan, as amended effective September 15, 1998		(3	)

10.12	1992 Restricted Stock Plan		(1	)

10.21	1994 Stock Option Plan, as amended effective September 15, 1998		(3	)

10.26	Simula, Inc. Employee Stock Purchase Plan		(2	)

10.27	Outside Directors Equity Plan		(9	)

10.37	Simula, Inc. 1999 Incentive Stock Option Plan		(4	)

10.41	Financing Agreement with The CIT Group/Business Credit, Inc. dated December 30,1999		(5	)

10.41A	Amendment Number Three to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated September 26, 2001		(7	)

10.41B	Amendment Number Five to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated June 30, 2002		(10	)

10.41C	Amendment Number Seven to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated October 22, 2002		(10	)

10.41D	Amendment Number Nine to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated March 25, 2003		(11	)

10.41E	Waiver to Certain Financial Covenants to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated April 9, 2003		(11	)

10.45	Loan Agreement between the Company and Allied Capital Corporation dated September 26, 2001		(7	)

10.45A	Waiver and Amendment No. 1 to Loan Agreement between the Company and Allied Capital Corporation dated August 19, 2002		(10	)

10.45B	Consent and Amendment No. 2 to Loan Agreement between the Company and Allied Capital Corporation dated March 25, 2003		(11	)

10.46	Employment Agreement between the Company and Bradley P. Forst dated November 12, 2001, effective October 1, 2000		(7	)

10.48	Employment Agreement between the Company and Joseph Coltman dated December 13, 2001, effective October 13, 2000		(8	)

10.50	Retention Agreement between the Company and John A. Jenson dated December 20, 2002		(11	)

31.1	Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K		*

31.2	Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K		*

32.1	Certification of Chief Executive Officer pursuant to item 601(b)(32) of Regulation S-K		*

32.2	Certification of Chief Financial Officer pursuant to item 601(b)(32) of Regulation S-K		*

* Filed herewith

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

	(2)		Filed with Definitive Proxy on May 15, 1996, for the Company’s Annual Meeting of Shareholders held on June 20, 1996.

	(3)		Filed with report on Form 10-Q for the quarter ended September 30, 1998.

	(4)		Filed with Definitive Proxy on May 14, 1999, for the Company’s Annual Meeting of Shareholders held on June 17, 1999.

	(5)		Filed with report on Form 10-K for the year ended December 31, 1999.

	(6)		Filed with report on Form 10-Q for the quarter ended March 31, 2000.

	(7)		Filed with report on Form 10-Q for the quarter ended September 30, 2001.

	(8)		Filed with report on Form 10-K for the year ended December 31, 2001.

	(9)		Filed with Registration Statement on Form S-8, effective March 28, 2002.

	(10)		Filed with report on Form 10-Q for the quarter ended September 30, 2002.

(11)

Filed with report on Form 10-K for the year ended December 31, 2002.

(b) Reports on Form 8-K:

	(1)		Report on Form 8-K dated July 23, 2003 disclosing the completion of the sale of our automotive safety business and the signing of a Letter of Intent to be acquired by Armor Holdings.

	(2)		Report on Form 8-K dated August 12, 2003 furnishing notification of issuance of a press release pertaining to earnings for the fiscal quarter ended June 30, 2003.

	(3)		Report on Form 8-K dated September 11, 2003 disclosing the execution of the Agreement and Plan of Merger with Armor Holdings.

	(4)		Report on Form 8-K/A dated July 23, 2003 furnishing notification of amendment to previous 8-K to add pro forma financial information related to the sale of our automotive safety business.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 10-Q for the quarter ended September 30, 2003 to be signed on its behalf by the undersigned thereunto duly authorized.


		SIMULA, INC.

DATE: November 14, 2003		/s/ John A. Jenson
		John A. Jenson
		Chief Financial Officer

INDEX TO EXHIBITS


No.	Description	Reference
3.1	Articles of Incorporation of Simula, Inc., as amended and restated		(2	)

3.2	Bylaws of Simula, Inc., as amended and restated		(1	)

4.7	Indenture dated April 1, 1997, in connection with the Company’s issuance of the 8% Senior Subordinated Convertible Notes due May 1, 2004		(6	)

10.11	1992 Stock Option Plan, as amended effective September 15, 1998		(3	)

10.12	1992 Restricted Stock Plan		(1	)

10.21	1994 Stock Option Plan, as amended effective September 15, 1998		(3	)

10.26	Simula, Inc. Employee Stock Purchase Plan		(2	)

10.27	Outside Directors Equity Plan		(9	)

10.37	Simula, Inc. 1999 Incentive Stock Option Plan		(4	)

10.41	Financing Agreement with The CIT Group/Business Credit, Inc. dated December 30,1999		(5	)

10.41A	Amendment Number Three to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated September 26, 2001		(7	)

10.41B	Amendment Number Five to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated June 30, 2002		(10	)

10.41C	Amendment Number Seven to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated October 22, 2002		(10	)

10.41D	Amendment Number Nine to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated March 25, 2003		(11	)

10.41E	Waiver to Certain Financial Covenants to Financing Agreement between the Company and The CIT Group/Business Credit, Inc. dated April 9, 2003		(11	)

10.45	Loan Agreement between the Company and Allied Capital Corporation dated September 26, 2001		(7	)

10.45A	Waiver and Amendment No. 1 to Loan Agreement between the Company and Allied Capital Corporation dated August 19, 2002		(10	)

10.45B	Consent and Amendment No. 2 to Loan Agreement between the Company and Allied Capital Corporation dated March 25, 2003		(11	)

10.46	Employment Agreement between the Company and Bradley P. Forst dated November 12, 2001, effective October 1, 2000		(7	)

10.48	Employment Agreement between the Company and Joseph Coltman dated December 13, 2001, effective October 13, 2000		(8	)

10.50	Retention Agreement between the Company and John A. Jenson dated December 20, 2002		(11	)

31.1	Certification of Chief Executive Officer pursuant to Item 601(b)(31) of Regulation S-K		*

31.2	Certification of Chief Financial Officer pursuant to Item 601(b)(31) of Regulation S-K		*

32.1	Certification of Chief Executive Officer pursuant to item 601(b)(32) of Regulation S-K		*

32.2	Certification of Chief Financial Officer pursuant to item 601(b)(32) of Regulation S-K		*

* Filed herewith

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

	(2)		Filed with Definitive Proxy on May 15, 1996, for the Company’s Annual Meeting of Shareholders held on June 20, 1996.

	(3)		Filed with report on Form 10-Q for the quarter ended September 30, 1998.

	(4)		Filed with Definitive Proxy on May 14, 1999, for the Company’s Annual Meeting of Shareholders held on June 17, 1999.

	(5)		Filed with report on Form 10-K for the year ended December 31, 1999.

	(6)		Filed with report on Form 10-Q for the quarter ended March 31, 2000.

	(7)		Filed with report on Form 10-Q for the quarter ended September 30, 2001.

	(8)		Filed with report on Form 10-K for the year ended December 31, 2001.

	(9)		Filed with Registration Statement on Form S-8, effective March 28, 2002.

	(10)		Filed with report on Form 10-Q for the quarter ended September 30, 2002.

	(11)		Filed with report on Form 10-K for the year ended December 31, 2002.

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SIMULA INC 10-Q