Analysis & Technology, Inc. Reports Record Revenue and Earnings for Fiscal 1998.

NORTH STONINGTON, Conn.--(BUSINESS WIRE)--MAY 7, 1998--

- 59% COMMERCIAL REVENUE GROWTH IN INTERACTIVE MEDIA CORP. SUBSIDIARY -

Analysis & Technology, Inc. (Nasdaq: AATI), a leading developer of engineering technologies and technology-based training solutions, today announced operating results for fiscal 1998 ended March 31, 1998. The Company reported record revenue and earnings, as well as 59% commercial revenue growth in its technology-based training subsidiary.

For the year ended March 31, 1998, Analysis & Technology's net earnings increased 24% to $4.2 million from $3.4 million in fiscal 1997. Diluted earnings per share, adjusted for the Company's January 28, 1998 three-for-two stock split, increased 15% to $1.07 from $0.93 for the comparable period of fiscal 1997. Basic earnings per share for the year, also adjusted for the split, increased 24% to $1.19 per share, compared to $0.96 per share during the prior year. Revenue for the twelve-month period increased 12% to $160.0 million, compared to $142.5 million during fiscal 1997.

For the quarter ended March 31, 1998, Analysis & Technology reported a 30% increase in net earnings to $1.1 million, compared to $865 thousand during the fourth quarter of fiscal 1997. Diluted earnings per share, adjusted for the Company's January 28, 1998 three-for-two stock split, increased 13% to $0.27 from the $0.24 reported for the fourth quarter of fiscal 1997. Basic earnings per share for the three-month period, also adjusted for the split, increased 24% to $0.31, compared to $0.25 during the prior year. Revenue for the quarter increased 12% to $43.6 million, compared to $38.9 million during the three-month period in fiscal 1997.

Gary P. Bennett, chairman and chief executive officer, said, "Fiscal year 1998 was an outstanding year for Analysis & Technology. Our strategy for growth produced record results, and we achieved improved margins in both our core engineering/IT business and in our technology-based training subsidiary through improved cost controls. I am also extremely pleased to report that Interactive Media's commercial revenue grew 59% year-over-year."

Mr. Bennett continued, "We are also very satisfied with our business momentum entering fiscal 1999, as fiscal 1998 marked a record year for new contract awards at $345.6 million, 60% of which came in during our fourth quarter. Contractual backlog at March 31, 1998 was $589 million, up 23% compared to $481 million reported for the same period last year. Key wins during the quarter were five- year contracts with potential values of $35 million (multiple award) with the Fleet Technical Support Center for fleet engineering, $23 million for engineering assessment work with the Naval Surface Warfare Center, and $21 million with the Naval Research Laboratory. Our Interactive Media subsidiary also won a five-year multiple award contract with potential value of $55 million to provide training services to the Internal Revenue Service."

"We will continue with our winning strategy," Mr. Bennett added, "which includes building our core engineering and information technologies business with the Department of Defense, while developing technology-based training business in new government and commercial markets."

Working with customers, Analysis & Technology creates technology- based solutions through engineering and information technologies. Its subsidiary, Interactive Media Corp., creates technology- and Web- based training using leading-edge multimedia technologies.

Information in this news release includes statements that are forward-looking as defined in the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Additional information and discussion concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in Analysis & Technology, Inc.'s fiscal year 1997 Annual Report to Shareholders, and in the Company's Form 10-K Annual Report. Copies of these documents may be obtained at no charge by calling Elaine Grimsell Beckwith, Investor Relations Manager, at 860-599-3910, extension 2630.

                    CONSOLIDATED STATEMENT OF EARNINGS
       for the Quarter and Year ended March 31, 1998 and 1997
          (amounts in thousands, except per share amounts)

                           Quarter Ended March 31,    Year Ended March 31,
                                 1998         1997         1998       1997
                          (unaudited)  (unaudited)
  Revenue                    $ 43,576      $38,899     $159,956   $142,547
  Operating earnings            2,347        1,829        7,945      6,770
  Earnings before income
  taxes                         2,006        1,523        8,344      5,813
  Net earnings               $  1,121     $    865    $   4,192   $  3,376
  Basic earnings per         $   0.31     $   0.25    $    1.19   $   0.96
  share
  Diluted earnings per
  common and common
  equivalent share          $    0.27     $   0.24   $     1.07  $    0.93

  Number of weighted
  average shares and
  common equivalent
  shares outstanding
     Basic                      3,596        3,469        3,530      3,500
     Diluted                    4,048        3,587        3,849      3,609

                  SUMMARY BALANCE SHEET INFORMATION
                       (amounts in thousands)

                                            March 31,       March 31,
                                                 1998            1997
     Current assets                     $      28,088      $   28,869
     Property and equipment, net               14,886          13,964
     Other assets                              20,635          14,980
     Total assets                       $      63,609      $   57,813
     Total Liabilities                  $      19,262      $   17,824
     Shareholders  equity                      44,347          39,989
     Total liabilities and
     shareholders  equity               $      63,609      $   57,813

CONTACT: Analysis & Technology, Inc.

Elaine Grimsell Beckwith, 860/599-3910, ext. 2630

E-mail: [e-mail]

Home Page: http://www.aati.com

or

Morgen-Walke Associates, Inc.

Cheryl Schneider, Stacey Levitz

Michael McMullan -- Press, 212/850-5600