DRS Technologies Receives Additional Funding Supporting Development of Electric Drive for U.S. Navy's New DD-X Destroyers.

Business Editors

PARSIPPANY, N.J.--(BUSINESS WIRE)--March 10, 2003

Combined Potential Value of Two Contracts Exceeds $85 Million

DRS Technologies, Inc. (NYSE:DRS) announced today that it has received additional funding for the design and manufacture of advanced electric propulsion equipment for the U.S. Navy's next-generation destroyer, the DD(X).

The combined potential value of the contract associated with this funding and another recently received award is expected to exceed $85 million.

The $2 million funding increase was awarded to the company's DRS Electric Power Technologies unit in Hudson, Massachusetts, by Northrop Grumman (NYSE:NOC) Newport News. The increment increases current funding to approximately $4.6 million.

DRS anticipates definitizing this effort during the company's fiscal 2004 first quarter beginning April 1, 2003, which is expected to result in an award exceeding $60 million in value. For this contract, the company will produce and deliver key motor and drive components of the DD(X) electric drive system engineering development models.

Under a separate $3.3 million letter contract received by the company's DRS Power Technology unit in Fitchburg, Massachusetts, awarded by the same customer, the company is providing other key elements of the DD(X) electric propulsion motor engineering development models.

Definitization of this contract is also anticipated during the company's fiscal 2004 first quarter and is expected to result in an award valued at more than $25 million.

Work on the DD(X) propulsion motor program will be concentrated in the company's facilities in Massachusetts and at the DRS Power & Control Technologies unit in Milwaukee, Wisconsin. Product deliveries are scheduled for early 2005.

"This additional funding is encouraging evidence of the Navy's confidence in DRS's design approach and its satisfaction with our progress on the DD(X) baseline hardware development program," said Terry L. DeRosa, president of DRS's Electronic Systems Group. "Our DD(X) equipment is an evolutionary next step for our proven permanent magnet industrial motors and will deliver outstanding performance for this platform. The equipment's performance, relative to its reduced size and weight, far exceeds the best available conventional technology and is comparable to published performance data on the most aggressive design concepts for other technologies, such as super conducting motors. Having already logged more than one million fault-free hours of operation in extreme industrial environments, our lightweight permanent magnet motor technology has demonstrated potential to support design enhancements for even further reductions in size and weight. The equipment we deliver to the Navy in early 2005 will be the most power dense equipment of this scale ever manufactured in the world."

The incremental funding increase announced today allows DRS to continue the design, manufacture, qualification and testing of an advanced technology electric drive motor, drive and control system for the DD(X) program. This equipment will meet all DD(X) shipboard specifications and requirements, and, following successful testing, will be ready for production.

The work performed under both contracts will provide the Navy with engineering model electric drive equipment that is the baseline for the DD(X) ship design, and will be used at the Navy's land-based Integrated Power Systems (IPS) test site in Philadelphia, Pennsylvania, and at sea in a modified destroyer.

This hardware is being developed in partnership with Northrop Grumman Newport News, which is under contract with Northrop Grumman Ship Systems.

The company added that it already is working on a next-generation, spiral development technology to further improve the performance of its permanent magnet motor equipment. The company also is developing a novel concept to significantly reduce the size and weight of companion electric drive generator equipment.

Mr. DeRosa added: "DRS is committed to developing advanced technology innovation to provide the U.S. Navy with high-performance, lightweight, low-cost equipment for its propulsion plants. These breakthrough products from our power systems business enhance our leadership position in advanced propulsion plant technology."

DRS Technologies is a leading supplier of high-performance power generation, conversion, electric propulsion and distribution equipment, networks, control systems, tactical displays and specialty nuclear reactor plant instrumentation for the U.S. Navy's combatant fleet and specialized industrial customers.

DRS has installed equipment on every U.S. Navy combatant ship since World War II, including nuclear-powered and conventionally-powered ships.

DRS Technologies provides leading edge products and services to government and commercial customers worldwide.

Focused on defense electronics, the company develops and manufactures a broad range of mission critical systems and components in the areas of communications, combat systems, battlefield digitization, electro-optics, power systems, data storage, digital imaging, flight safety and space.

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

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