DRS Technologies Reports Record Fiscal 2000 Results.

Business Editors

PARSIPPANY, N.J.--(BUSINESS WIRE)--May 18, 2000

Revenues, Operating Income, Bookings And Backlog Are Fourth

Quarter Records;

Diluted EPS Of 76 Cents From Continuing Operations Up 33%

For Fiscal Year

DRS Technologies, Inc. (ASE:DRS) today reported record financial results from continuing operations for the fiscal year ended March 31, 2000. Fourth quarter revenues, operating income, EBITDA, bookings and backlog also reached record levels.

Fiscal 2000 fourth quarter revenues from continuing operations set a new quarterly record of $113,998,000, up 11 percent from revenues of $102,418,000 reported for the fourth quarter last year.

Record quarterly operating income of $8,665,000 from continuing operations was 30 percent higher than the $6,666,000 reported for the same three-month period in fiscal 1999.

Earnings before interest, taxes, depreciation and amortization (EBITDA) reached a quarterly high of $12,974,000, 19 percent above EBITDA of $10,910,000 for the same three-month period in the previous fiscal year.

Net earnings from continuing operations were $3,128,000, or $0.29 per diluted share, an improvement of 45 percent over the prior year's fourth quarter net earnings of $2,150,000, or $0.24 per diluted share, despite the effect of restructuring charges of approximately $1,802,000, or $.09 per diluted share, during the final three months of fiscal 2000. Diluted earnings per share from continuing operations without the restructuring charges would have been $0.38 for the quarter.

These charges were the result of plant closures and operational consolidations during the fourth quarter, as the company continued its program of cost reductions and long-term operational improvements. Steps taken during the fourth quarter included the closing of the company's DRS Rugged Systems unit in Colorado and the consolidation of domestic electronic systems manufacturing into one facility, a plant closure and the consolidation of the company's DRS Photronics unit into one facility in New Jersey, and the integration of two facilities into one in the United Kingdom.

"DRS posted strong results from continuing operations in the fourth quarter, which were in line with the solid financial performance we reported throughout fiscal 2000," said Mark S. Newman, chairman, president and chief executive officer of DRS Technologies. "During the three-month period, we established new quarterly records in revenues, operating income and EBITDA, and achieved further progress toward continued margin improvement and increased profitability. We also exceeded our targets for capturing new orders and booked a quarterly record of new business valued at $156 million, resulting in the highest backlog in the company's history."

DRS announced earlier today that it entered into a definitive agreement to sell its commercial magnetic tape head business units in the Mid-West and Bulgaria. As a result, DRS reported discontinued operations for fiscal 2000.

Net earnings for the fourth quarter were $508,000, or $0.07 per diluted share, after a loss of $524,000, net of tax, from discontinued operations and a charge of $2,096,000, net of tax, from the disposal of the discontinued operations.

Mr. Newman continued, "The sale of our magnetic head business units, coupled with the cost reduction measures already implemented throughout fiscal 2000, is expected to have a substantially favorable impact on net earnings in fiscal 2001 and supports our long-term commitment to enhancing stockholder value."

For the full fiscal year, DRS reported record revenues of $391,467,000, 47 percent above revenues of $265,849,000 for fiscal 1999.

The company posted a new high in operating income of $26,178,000 for fiscal 2000, a 71 percent increase over $15,301,000 in operating income posted a year ago.

Record EBITDA of $42,893,000 was 59 percent above EBITDA of $27,048,000 reported for last fiscal year.

DRS posted record net earnings from continuing operations of $7,661,000, or $0.76 per diluted share, 98 percent higher than net earnings of $3,865,000, or $0.57 per diluted share, before a charge for an extraordinary item of $2,306,000 in fiscal 1999. Net earnings for fiscal 2000 included restructuring charges of approximately $2,203,000, or $0.11 per diluted share, for plant closures and operational consolidations related to the company's cost reduction program, as well as management changes at DRS's Electro-Optical Systems Group. Diluted earnings per share from continuing operations without the restructuring charges would have been $0.87 for fiscal 2000.

For fiscal 2000, DRS posted net earnings of $4,310,000, or $0.47 per diluted share, after a loss of $1,255,000, net of tax, from discontinued operations and a charge of $2,096,000, net of tax, from the disposal of discontinued operations. Net earnings for the full year were a substantial improvement over last year's net earnings of $680,000, or $0.10 per diluted share, after the charge for the extraordinary item.

"DRS turned in record performance from continuing operations for fiscal 2000, reaching new highs in revenues, operating income, EBITDA, net earnings, bookings and backlog," said Mr. Newman. "Outstanding results for the full year were achieved in our display systems, rugged computers, infrared sighting systems and flight safety systems product lines."

"Looking to the future, the prospects for the company remain excellent," he added. "We are in a strong position to demonstrate accelerated profitability and achieve long-term revenue growth. We are continuing to evaluate several opportunities to expand our core business base through the acquisition of niche market leaders focused in defense electronics and related commercial areas. The momentum achieved in fiscal 2000 by a record $406 million in new orders supports our positive expectations for the new fiscal year. Our proven business strategies have positioned DRS as a dynamic and growing company."

Record revenues from continuing operations for fiscal 2000 were positively impacted by businesses acquired in fiscal 1999, and by the benefit of a full twelve months of sales from the company's rugged systems, ground electro-optical systems and focal plane array product lines. Higher revenues also were attributable to increased shipments of the company's military display workstation products.

Substantially higher operating income during fiscal 2000 was due to increased revenues, primarily as a result of businesses acquired last fiscal year, and to the cost reduction and consolidation initiatives implemented by the company in the second half of the fiscal year.

The company's record $406 million in new contract awards for fiscal 2000 was an increase of 29 percent over last year. Funded backlog at March 31, 2000 was a record $388 million. Mr. Newman highlighted some of the key awards received during the year:

- $96.4 million in new awards for workstations, advanced display

systems and peripheral equipment used by the U.S. Navy's ship,

aircraft and submarine fleets.

- $48.5 million in contracts to produce rugged computers and

peripheral products to support U.S. and international

battlefield digitization programs.

- $42.9 million in new contracts from the U.S. Army for

engineering and production of Thermal Imaging Systems for the

sighting systems of the Abrams and Bradley ground vehicles

under the Horizontal Technology Integration (HTI) program.

- $31.6 million in new orders for weapons fire control and

laser-based products used in various military weapons systems

and training applications.

- $22.5 million in contracts for deployable flight incident and

mission recorders, avionics systems and emergency locator

beacons for international aircraft worldwide.

- $19.8 million in new contracts to provide Improved Bradley

Acquisition Subsystems (IBAS) for the U.S. Army's Bradley

vehicle targeting and acquisition system.

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 products, from rugged computers and peripherals to systems and components in the areas of communications, data storage, digital imaging, electro-optics, flight safety and space.

Additional information is available on the company's web site at www.drs.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the matters set forth in this news release are forward-looking statements. The forward-looking statements set forth above involve a number of risks and uncertainties that could cause actual results to differ materially from any such statement, and include, without limitation, demand and competition for the Company's products and other risks or uncertainties detailed in the Company's Securities and Exchange Commission filings.

               DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

                                         Three Months Ended March 31,
                                              2000           1999

Revenues                                 $ 113,998,000  $ 102,418,000
Restructuring Charges                    $   1,802,000  $        --
Operating Income                         $   8,665,000  $   6,666,000
Earnings before Interest, Taxes,
 Depreciation and Amortization (EBITDA)  $  12,974,000  $  10,910,000
Interest and Related Expenses            $   3,097,000  $   3,256,000
Earnings from Continuing Operations
 before Income Taxes                     $   5,238,000  $   3,326,000
Net Earnings from Continuing Operations  $   3,128,000  $   2,150,000
Loss from Discontinued Operations,
 Net of Tax                              $    (524,000) $    (209,000)
Loss on Disposal of Discontinued
 Operations, Net of Tax                  $  (2,096,000) $        --
Net Earnings                             $     508,000  $   1,941,000
Net Earnings per Share of Common Stock:
  Basic Earnings per Share:
    Net Earnings from Continuing
     Operations                          $         .34  $         .28
    Loss from Discontinued Operations,
      Net of Tax                         $        (.06) $        (.03)
    Loss on Disposal of Discontinued
      Operations, Net of Tax             $        (.23) $        --
    Net Earnings                         $         .05  $         .25
  Diluted Earnings per Share:
    Net Earnings from Continuing
     Operations                          $         .29  $         .24
    Loss from Discontinued Operations,
      Net of Tax                         $        (.04) $        (.02)
    Loss on Disposal of Discontinued
      Operations, Net of Tax             $        (.18) $        --
    Net Earnings                         $         .07  $         .22
Weighted Average Number of Shares of
  Common Stock Outstanding:
  Basic                                      9,276,000      7,694,000
  Diluted                                   11,680,000     10,065,000



               DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

                                              Year Ended March 31,
                                              2000           1999

Revenues                                 $ 391,467,000  $ 265,849,000
Restructuring Charges                    $   2,203,000  $        --
Operating Income                         $  26,178,000  $  15,301,000
Earnings before Interest, Taxes,
 Depreciation and Amortization (EBITDA)  $  42,893,000  $  27,048,000
Interest and Related Expenses            $  12,600,000  $   9,357,000
Earnings from Continuing Operations
 before Extraordinary Item and Income
 Taxes                                   $  12,832,000  $   5,780,000
Net Earnings from Continuing Operations
 before Extraordinary Item               $   7,661,000  $   3,865,000
Loss from Discontinued Operations, Net
 of Tax                                  $  (1,255,000) $    (879,000)
Loss on Disposal of Discontinued
 Operations, Net of Tax                  $  (2,096,000) $        --
Net Earnings before Extraordinary Item   $   4,310,000  $   2,986,000
Extraordinary Item, Net of Tax           $        --    $  (2,306,000)
Net Earnings                             $   4,310,000  $     680,000
Net Earnings per Share of Common Stock:
  Basic Earnings per Share:
    Net Earnings from Continuing
     Operations before Extraordinary
     Item                                $         .83  $         .58
    Loss from Discontinued Operations,
     Net of Tax                          $        (.14) $        (.13)
    Loss on Disposal of Discontinued
     Operations, Net of Tax              $        (.23) $        --
    Extraordinary Item, Net of Tax       $        --    $        (.35)
    Net Earnings                         $         .47  $         .10
  Diluted Earnings per Share:
    Net Earnings from Continuing
     Operations before Extraordinary
     Item                                $         .76  $         .57
    Loss from Discontinued Operations,
     Net of Tax                          $        (.11) $        (.13)
    Loss on Disposal of Discontinued
     Operations, Net of Tax              $        (.18) $        --
    Extraordinary Item, Net of Tax       $        --    $        (.34)
    Net Earnings                         $         .47  $         .10
Weighted Average Number of Shares of
  Common Stock Outstanding:
  Basic                                      9,268,000      6,618,000
  Diluted                                   11,602,000      6,832,000



               DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
      FOURTH QUARTER SEGMENT RESULTS FROM CONTINUING OPERATIONS
                             (UNAUDITED)

                                        Three Months Ended March 31,
                                            2000            1999

Electronic Systems Group
Revenues                               $  48,420,000   $  44,024,000
Operating Income                       $   3,917,000   $   3,535,000
Operating Margin                                 8.1%            8.0%
Bookings                               $  54,796,000   $  24,340,000
Backlog                                $ 136,086,000   $ 123,968,000

Electro-Optical Systems Group
Revenues                               $  45,712,000   $  36,497,000
Operating Income                       $   3,895,000   $   2,372,000
Operating Margin                                 8.5%            6.5%
Bookings                               $  69,184,000   $  19,771,000
Backlog                                $ 191,708,000   $ 185,315,000

Flight Safety and Communications Group
Revenues                               $  17,842,000   $  19,582,000
Operating Income                       $   2,412,000   $   2,023,000
Operating Margin                                13.5%           10.3%
Bookings                               $  30,052,000   $  23,506,000
Backlog                                $  58,403,000   $  49,624,000

Other
Revenues                               $   2,024,000   $   2,315,000
Operating Loss                         $  (1,559,000)  $  (1,264,000)
Operating Margin                               (77.0)%         (54.6)%
Bookings                               $   2,032,000   $   2,763,000
Backlog                                $   1,942,000   $   3,781,000


Total
Revenues                               $ 113,998,000   $ 102,418,000
Operating Income                       $   8,665,000   $   6,666,000
Operating Margin                                 7.6%            6.5%
Bookings                               $ 156,064,000   $  70,380,000
Backlog                                $ 388,139,000   $ 362,688,000

NOTE: Certain fiscal 1999 results have been restated to reflect the
      Company's current operating structure.



               DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
        FISCAL YEAR SEGMENT RESULTS FROM CONTINUING OPERATIONS
                             (UNAUDITED)

                                            Year Ended March 31,
                                            2000            1999

Electronic Systems Group
Revenues                               $ 187,796,000   $ 123,558,000
Operating Income                       $  14,593,000   $   9,292,000
Operating Margin                                 7.8%            7.5%
Bookings                               $ 189,870,000   $ 124,261,000
Backlog                                $ 136,086,000   $ 123,968,000

Electro-Optical Systems Group
Revenues                               $ 141,106,000   $  69,972,000
Operating Income                       $  11,404,000   $   3,581,000
Operating Margin                                 8.1%            5.1%
Bookings                               $ 147,499,000   $ 109,919,000
Backlog                                $ 191,708,000   $ 185,315,000

Flight Safety and Communications Group
Revenues                               $  54,209,000   $  60,438,000
Operating Income                       $   2,762,000   $   4,684,000
Operating Margin                                 5.1%            7.8%
Bookings                               $  62,094,000   $  66,870,000
Backlog                                $  58,403,000   $  49,624,000

Other
Revenues                               $   8,356,000   $  11,881,000
Operating Loss                         $  (2,581,000)  $  (2,256,000)
Operating Margin                               (31.0)%         (19.0)%
Bookings                               $   6,517,000   $  13,103,000
Backlog                                $   1,942,000   $   3,781,000


Total
Revenues                               $ 391,467,000   $ 265,849,000
Operating Income                       $  26,178,000   $  15,301,000
Operating Margin                                 6.7%            5.8%
Bookings                               $ 405,980,000   $ 314,153,000
Backlog                                $ 388,139,000   $ 362,688,000

NOTE: Certain fiscal 1999 results have been restated to reflect the
      Company's current operating structure.



               DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
          CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

                                                  March 31,
                                             2000           1999

Assets
Cash and Cash Equivalents                $  3,778,000   $ 10,031,000
Other Current Assets                      154,855,000    156,510,000
Total Current Assets                      158,633,000    166,541,000
Property, Plant and Equipment, Net         29,006,000     32,124,000
Intangible and Other Assets               132,459,000    130,974,000
Total Assets                             $320,098,000   $329,639,000


Liabilities and Stockholders' Equity
Short-Term Debt                          $ 17,781,000   $  9,169,000
Current Installments of Long-Term Debt      5,699,000      5,844,000
Accounts Payable and Other Current
 Liabilities                              113,769,000    134,220,000
Total Current Liabilities                 137,249,000    149,233,000
Long-Term Debt, Excluding Current
 Installments                              97,695,000    102,091,000
Other Liabilities                           6,970,000      4,873,000
Net Stockholders' Equity                   78,184,000     73,442,000
Total Liabilities and Stockholders'
 Equity                                  $320,098,000   $329,639,000