Dynamics Research Corporation Announces Acquisition of Andrulis Corporation.

Business Editors/High-Tech Writers

ANDOVER, Mass.--(BUSINESS WIRE)--Dec. 19, 2002

Dynamics Research Corporation (Nasdaq:DRCO) today announced it has agreed to acquire privately held Andrulis Corporation, a Washington, D.C.-based provider of information technology and engineering services to government customers with revenues of $36.6 million for the year ended September 30, 2002. The transaction is expected to close this month for a purchase price of $26.0 million, subject to adjustments, with approximately half to be paid in cash and the remainder to be paid by promissory note due in January 2003. The purchase price will be funded from cash on-hand and the company's $50 million revolving credit facility.

"We are delighted to become a member of the DRC professional family and are enthusiastic about the opportunities for the advancement of our employees and for expanding our capabilities to better serve our customers," said Dr. Marilyn Andrulis, co-founder, chairman and chief executive officer of Andrulis Corporation who plans to pursue other interests following the closure of the transaction with DRC.

"This acquisition is in many ways a transforming event for DRC. The addition of ANDRULIS customers, employees, and capabilities will greatly strengthen DRC's business operations across all of the major markets that we serve," said James P. Regan, DRC chairman and chief executive officer. "In particular DRC's presence with Department of Defense and Civil Agencies will be significantly expanded with the addition of several new customers. We will be much better positioned to pursue emerging national priority programs in areas related to homeland security and defense. We are also enhancing our ability to reach our challenging strategic growth objectives. Given the high degree of compatibility of the cultures of our two companies, characterized by a customer satisfaction focus, I expect the integration phase to move quickly and smoothly."

DRC said it expects the acquisition to add an estimated $1.0 to $1.5 million to 2002 revenues. The effect on 2002 profit is expected to be inconsequential, considering one-time expenses related to the acquisition. For 2003, the company projects revenue growth derived from the acquired business in the range of 8 to 12 percent, generating operating margin in the range of 6.8 to 7.0 percent, including amortization of acquired intangibles estimated at $1.5 to $1.7 million.

About Andrulis Corporation

Andrulis Corporation, founded in 1971, provides information technology and engineering solutions to federal government customers. The company's defense customers include the Office of Naval Research, the Naval Ammunitions Logistics Center, the Naval Sea Logistics Center, the Naval Surface Warfare Center, the Military Sealift Command and the Missile Defense Agency. The company's civilian agency customers include the Immigration and Naturalization Service, the Department of Housing and Urban Development, the National Science Foundation, the Department of Commerce and the Department of Justice. For the year ended September 30, 2002, ANDRULIS recorded revenues of $36.6 million, $16 and $12 million in Navy and federal civilian agency revenues, respectively, and earnings before interest, taxes, depreciation and amortization, adjusted for $2.2 million of non-recurring items, of $3.7 million. Non-recurring items in 2002 consisted primarily of legal fees and transition costs related to the company's acquisitions of CEN Corporation and Production Technologies, Inc. More than 95% of the company's revenues were derived from prime contracts. By contract type 61% were time and materials, 26% were cost plus fee, and 13% were fixed price. Funded backlog at September 30, 2002 was $ 16.6 million. The company has approximately 300 employees.

The Windsor Group acted as financial advisor to ANDRULIS on the transaction and Holland & Knight served as legal counsel.

About Dynamics Research Corporation

Dynamics Research Corporation is an innovative solutions provider that partners with its customers in government and commercial sectors to apply proven processes and technologies. DRC delivers engineering, logistics, training, simulation & modeling and information technology services and precision manufactured products that enhance the performance and cost effectiveness of its customers' mission critical systems. For additional information about DRC please visit the website at www.drc.com.

Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Some statements contained or implied in this news release, may be considered forward-looking statements, which by their nature are uncertain. Consequently, actual results could materially differ. For more detailed information concerning how risks and uncertainties could affect the company's financial results, please refer to DRC's most recent filings with the SEC. The company assumes no obligation to update any forward-looking information.