DRS Technologies reports record results for the fourth quarter and fiscal year.

PARSIPPANY, N.J.--(BUSINESS WIRE)--May 21, 1997--DRS Technologies Inc. (ASE:DRS) today reported record results for the fourth quarter and fiscal year ended March 31, 1997.

Fiscal 1997 revenues increased 42%, net earnings increased 38%, and new order bookings increased 9% to record levels above the prior year.

Revenues for the fourth quarter of fiscal 1997 were a record $44,336,000, up 24% from $35,826,000 reported for the last three months of fiscal 1996. Net earnings increased 8% to a quarterly record of $1,741,000 versus $1,608,000 earned for the same period in the previous year. Fully diluted earnings per share were 24 cents, compared with 23 cents for last year's fourth quarter.

Fiscal 1997 full-year revenues were a record $143,578,000, 42% higher than $101,454,000 reported last year. Record net earnings for the 12-month period were $5,663,000, up 38% from $4,103,000 posted for fiscal 1996. Fully diluted earnings per share of 84 cents also were a record and 22% higher than 69 cents per share earned a year ago.

The revenue growth during both periods was attributable principally to shipments associated with the company's military display workstation and electro-optical system product lines, and to substantial increases in certain commercial product sales, the latter as a result, in part, to acquisitions completed during the fiscal year in line with DRS's plan to broaden its participation in targeted strategic commercial product areas.

Operating income for fiscal 1997 increased 47% to a record $12,582,000, compared with $8,547,000 reported a year earlier. For the fourth quarter, DRS posted a quarterly record in operating income of $3,828,000, rising 19% above $3,208,000 for the same period last year. The improvements were due primarily to the overall increase in revenues and to higher profits generated by certain commercial product lines of DRS.

New business orders in fiscal 1997 reached the highest level in DRS's history -- valued at approximately $113 million -- 9% higher than bookings of $104 million for fiscal 1996. Funded backlog at March 31, 1997, was approximately $118 million versus $146 million a year ago. The decrease was due primarily to a shift in the company's backlog to include a higher percentage of commercial product orders and defense contracts for Commercial Off-The-Shelf (COTS)-based systems, both of which favor shorter lead times, as well as to shipments of the company's AN/UYQ-65 display workstations.

Commenting on the results, Mark S. Newman, chairman, president and chief executive officer of DRS Technologies, stated, "We are pleased to report another record year for DRS, representing our fifth consecutive year of improved financial performance.

"Fiscal 1997 was exceptionally strong for DRS, substantially expanding our revenue base, accelerating profitability and booking a record amount of new business orders. We continued to strengthen our defense electronics operations by proactively positioning DRS for opportunities well-suited for mid-tier companies, despite the consolidation of the aerospace and defense industries, by performing well on existing contracts, by securing important new program awards and by strategically allying with companies that are industry leaders on high-priority defense programs. During the year, the company also added to its growing commercial product lines through internal development and acquisitions, which we expect will continue to favorably impact operating results. We are well-positioned to achieve our goals in fiscal 1998."

DRS Technologies is a diversified, high-technology company serving government and commercial niche markets worldwide. The company develops and manufactures a variety of leading edge systems and components used for the processing, display and storage of data. DRS provides its customers with a broad range of products, including electronic sensor, electronic imaging and electro-optical systems, and offers a full complement of technical support services. The company's defense electronics products serve all branches of the armed forces. Its commercial and industrial products are used mainly by the airline, banking, computer disk drive, security, transportation, retail sales and broadcast industries. -0-

         Diagnostic/Retrieval Systems Inc. and Subsidiaries d.b.a.
                        DRS Technologies, Inc.
           Condensed Consolidated Statements of Earnings
                            (Unaudited)

                                 Three Months Ended March 31,
                                    1997              1996

Revenues                        $44,336,000       $35,826,000
Operating Income                $ 3,828,000       $ 3,208,000
Earnings before Income Taxes    $ 2,855,000       $ 2,638,000
Net Earnings                    $ 1,741,000       $ 1,608,000
Net Earnings per Share
 of Common Stock
   Primary                      $       .30       $       .28
   Fully Diluted                $       .24       $       .23
Weighted Average Number
 of Shares of Common Stock
 Outstanding
  Primary                         5,814,000         5,648,000
  Fully Diluted                   8,971,000         8,976,000

                                     Year Ended March 31,
                                    1997             1996

Revenues                       $143,578,000      $101,454,000
Operating Income               $ 12,582,000      $  8,547,000
Earnings before Income Taxes   $  9,284,000      $  6,727,000
Net Earnings                   $  5,663,000      $  4,103,000
Net Earnings per Share
  of Common Stock
   Primary                     $        .98      $        .73
   Fully Diluted               $        .84      $        .69
Weighted Average Number
 of Shares of Common Stock
 Outstanding
   Primary                        5,753,000         5,648,000
   Fully Diluted                  8,931,000         7,030,000

CONTACT: DRS Technologies, Inc.

Patricia M. Williamson, 201/898-1500

or

Kehoe, White, Savage & Company

John P. Kehoe/Van Negris, 212/888-1616