DRS Technologies Awarded $26 Million Contract to Produce Phalanx Thermal Imagers For U.S. Navy Weapon Systems.

PARSIPPANY, N.J. -- DRS Technologies, Inc. (NYSE: DRS) announced today that it received a $26 million contract, with an option for an additional $23 million contract, to produce, integrate, test, and deliver Phalanx Thermal Imagers for the MK 15 Phalanx Close-In Weapon System (CIWS). The contract was awarded to DRS by the Missile Systems business of Raytheon Company (NYSE: RTN) in Louisville, Kentucky.

The imagers were developed by the company's DRS Sensors & Targeting Systems unit - California Division in Cypress, California, but the production work for this contract will be accomplished by the unit's Optronics Division in Palm Bay, Florida. DRS will start delivering the imagers immediately with completion expected by July 2008.

The Phalanx CIWS is a shipboard defense weapon system currently deployed on every class of U.S. Navy combat ship, as well as on various international vessels. It is a fast-reaction, rapid-fire, 20-millimeter gun system that automatically detects, tracks, and engages incoming anti-ship missiles, aircraft and littoral warfare threats and is designed to be used at short ranges. It provides ships with a "last-chance" self-defense capability against these threats that have penetrated other fleet defense systems.

"Using the DRS-produced Phalanx Thermal Imager is a significant upgrade to the existing, first-generation Forward Looking Infrared (FLIR) system currently incorporated into the Phalanx weapon system," said James M. Baird, president of DRS' Reconnaissance, Surveillance & Target Acquisition (RSTA) Business Segment. "This contract and program strengthens our relationship with Raytheon and the U.S. Navy, and our portfolio of thermal imaging products will now have a shipboard application in conjunction with the systems we provide to other branches of the U.S. military."

The Phalanx CIWS contains fully integrated radar and infrared surveillance capabilities for the automatic or manual acquisition and tracking of enemy threats. DRS' Phalanx Thermal Imagers incorporate the second generation FLIR technology similar to that used by the company in the Horizontal Technology Integration series of sighting system products, currently being produced and delivered to the U.S. Army and U.S. Marine Corps for ground combat systems.

The RSTA business segment develops, manufactures and supports electro-optical technologies, including advanced cooled and uncooled thermal-imaging solutions for soldier systems, ground vehicle, airborne, and maritime as well as for industrial, security, public safety and firefighting applications.

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.