DRS Technologies Awarded $10 Million Contract to Produce Phalanx Thermal Imager for U.S. Navy Combat Vessels.

PARSIPPANY, N.J. -- DRS Technologies, Inc. (NYSE: DRS) announced today that it has received a $10 million contract to produce the Phalanx Thermal Imager for the MK 15 Phalanx Close-In Weapons System (CIWS), a shipboard defense weapons system currently deployed on every class of U.S. Navy combatant ships, as well as various international vessels. Phalanx, a fast-reaction, rapid-fire, 20-millimeter gun system, provides ships with a "last-chance" self-defense capability against incoming anti-ship missiles, aircraft and littoral warfare threats that have penetrated other fleet defenses by utilizing automatic detection, tracking and engagement.

The contract was awarded to DRS by the Missile Systems division of Raytheon Company (NYSE: RTN) in Louisville, Kentucky. For this award, DRS will produce, integrate, test and deliver this new thermal imaging system to be integrated into the Phalanx Block 1B configuration. This upgrade was developed for installation on various U.S. Navy combatants and also can be installed on international vessels currently employing the Phalanx system. The Phalanx Thermal Imager was developed by the company's DRS Sensors & Targeting Systems - California Division in Cypress, California. Production work for this award will be accomplished by the company's DRS Sensors & Targeting Systems - Optronics Division in Palm Bay, Florida. Product deliveries will commence in October.

"This award represents a significant upgrade to the existing, first-generation Forward Looking Infrared (FLIR) systems, providing improved thermal imaging, acquisition and tracking capability to the Phalanx weapon system," said Fred L. Marion, president of DRS's Surveillance & Reconnaissance Group. "The receipt of this contract reflects DRS's ability to meet complex technical and operational requirements from design through production. It strengthens our relationship with our customer and the U.S. Navy, adding shipboard application of our thermal imaging products to our portfolio of currently active FLIR systems provided by DRS to other branches of the military for ground- and air-based applications."

The Phalanx Block 1B configuration contains fully integrated radar, infrared surveillance and tracking capabilities for the automatic or manual acquisition and tracking of enemy threats and will include the latest variant of the Phalanx Thermal Imager, incorporating second generation FLIR technology similar to that used in the Horizontal Technology Integration (HTI) series of sighting system products currently being produced and delivered by DRS to the U.S. Army and U.S. Marine Corps for ground combat systems.

Designed to engage anti-ship missiles and fixed-wing aircraft at short ranges, Phalanx automatically employs functions typically performed by separate, independent systems, such as surveillance, detection, threat evaluation, target acquisition, tracking and firing. Phalanx automatically will engage incoming anti-ship missiles and high-speed, low-level aircraft that have penetrated the fleet's primary defense perimeter.

DRS Technologies, headquartered in Parsippany, New Jersey, is a leading supplier of integrated products, services and support to military forces, intelligence agencies and prime contractors worldwide. The company employs approximately 10,000 people.

For more information about DRS Technologies, please visit the company's web site at www.drs.com.