Dynamics Research Corporation Reports First Quarter 2009 Results

ANDOVER, Mass., April 29, 2009 (GLOBE NEWSWIRE) -- Dynamics Research Corporation
(Nasdaq:DRCO), a leading provider of innovative management consulting,
engineering, technical and information technology services and solutions to
federal and state governments, today announced operating results for the first
quarter ended March 31, 2009.

Financial Results

The Company reported revenue of $68.5 million for the first quarter of 2009 as
compared with $56.5 million for the same period in 2008. Reported revenue rose
21 percent on a year-over-year basis, including organic revenue growth of 5
percent. Net income for the first quarter of 2009 was $1.8 million, or $0.18 per
diluted share, up from $1.4 million, or $0.15 per diluted share, for the first
quarter of 2008, excluding a litigation provision in the first quarter of 2008
of $6.7 million, net of taxes. Reported results for the first quarter of 2008,
including the litigation provision, reflected a net loss of $5.3 million, or
$0.56 per share.

Business Highlights

"We are very pleased to be reporting our eleventh consecutive quarter of
improving operating results, which exceeded our guidance expectations in terms
of both revenue growth and earnings improvement," said Jim Regan, DRC's chairman
and chief executive officer. "Organic revenue rose five percent, operating
profit was up 33 percent over the first quarter of 2008, excluding the
litigation provision in the 2008 results, EBITDA of $5.4 million was up 40% on a
year-over-year basis, and cash generated by operating activities of $3.4 million
was strong."

"While federal services procurement activity was modest in the quarter, we
anticipate that proposal activity will pick up as the year progresses and
believe we are well positioned for success in these competitions. We remain
focused on a selected number of targeted growth markets -- Homeland Security,
the Federal Financial Civilian Agencies, Health Care, Human Capital Management
and Training, Business Transformation, and Cyber-Security -- where we are seeing
strong demand for our services and solutions. By focusing on providing
differentiated, high-value solutions and services to clients in our target
markets, we are confident in our ability to expand in these markets and
successfully respond to Federal priorities," added Regan.

Company Guidance

The Company's estimate for revenue for 2009 is in the range of $280 to $290
million, unchanged from previous estimates. Regarding earnings for 2009 the
Company anticipates results to be in the range of $0.90 to $1.00 per diluted
share, also unchanged from previous estimates. For the second quarter of 2009,
the Company anticipates revenue in the range of $69 to $71 million and earnings
per diluted share of $0.19 to $0.21.

Conference Call

The Company will conduct a first quarter 2009 conference call tomorrow, April
30, 2009 at 10:00 a.m. ET. The call will be available via telephone at
(800)357-9448 and accessible via Web cast at www.drc.com. Recorded replays of
the conference call will be available on Dynamics Research Corporation's
investor relations home page at www.drc.com and by telephone at (888)203-1112,
passcode #9435179, beginning at 2:01 p.m. ET April 30, 2009 through 11:59 p.m.
ET May 14, 2009.

About Dynamics Research Corporation

Dynamics Research Corporation (DRC) is a leading provider of mission-critical
technology management services and solutions for government programs. DRC offers
the capabilities of a large company and the responsiveness of a small company,
backed by a history of excellence and customer satisfaction. Founded in 1955,
DRC is a publicly held corporation (Nasdaq:DRCO) and maintains more than 25
offices nationwide with major offices in Andover, Massachusetts and the
Washington, D.C. area. For more information please visit our website at
www.drc.com.

Safe Harbor

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.

The non-GAAP measures used by the Company exclude the provision for litigation
charges and related effect for income taxes. The required reconciliations and
other disclosures for the non-GAAP measures used by the Company are set forth
later in this press release and/or the Current Report on Form 8-K to be filed
with the SEC on April 29, 2009.

ATTACHMENT I

DYNAMICS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(in thousands, except share and per share data)

Three Months Ended
March 31,
----------------------
2009 2008
---------- ----------
Contract revenue $ 67,203 $ 54,773
Product sales 1,336 1,705
---------- ----------
Total revenue 68,539 56,478
---------- ----------

Cost of contract revenue 55,943 46,212
Cost of product sales 1,518 1,605
---------- ----------
Total cost of revenue 57,461 47,817
---------- ----------

Gross profit on contract revenue 11,260 8,561
Gross profit (loss) on product sales (182) 100
---------- ----------
Total gross profit 11,078 8,661

Selling, general and administrative expenses 6,457 5,401
Provision for litigation -- 8,819
Amortization of intangible assets 973 509
---------- ----------
Operating income (loss) 3,648 (6,068)
Interest expense, net (619) (139)
Other income (expense) 39 (71)
---------- ----------
Income (loss) before provision for income taxes 3,068 (6,278)
Provision (benefit) for income taxes 1,297 (1,022)
---------- ----------
Net income (loss) $ 1,771 $ (5,256)
========== ==========

Earnings (loss) per common share
Basic $ 0.18 $ (0.56)
Diluted $ 0.18 $ (0.56)

Weighted average shares outstanding
Basic 9,604,895 9,436,054
Diluted 9,711,084 9,436,054

ATTACHMENT II

DYNAMICS RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)

March 31, December 31,
2009 2008
----------- -----------
Assets
Current assets
Cash and cash equivalents $ 4,383 $ 7,111
Contract receivables, net 71,761 71,438
Prepaid expenses and other current assets 3,401 2,491
----------- -----------
Total current assets 79,545 81,040
----------- -----------
Noncurrent assets
Property and equipment, net 8,821 9,349
Goodwill 97,641 97,641
Intangible assets, net 6,406 7,379
Deferred tax asset 10,369 10,396
Other noncurrent assets 3,042 3,125
----------- -----------
Total noncurrent assets 126,279 127,890
----------- -----------
Total assets $ 205,824 $ 208,930
=========== ===========

Liabilities and stockholders' equity
Current liabilities
Current portion of long-term debt $ 8,000 $ 8,000
Accounts payable 17,720 18,095
Accrued compensation and employee benefits 13,419 13,644
Deferred taxes 3,492 2,670
Other accrued expenses 20,898 24,760
----------- -----------
Total current liabilities 63,529 67,169
----------- -----------
Long-term liabilities
Long-term debt 28,296 30,000
Other long-term liabilities 30,523 30,286
Total stockholders' equity 83,476 81,475
----------- -----------
Total liabilities and stockholders'
equity $ 205,824 $ 208,930
=========== ===========

ATTACHMENT III

DYNAMICS RESEARCH CORPORATION
SUPPLEMENTAL INFORMATION (unaudited)
(dollars in thousands)

Contract revenues were earned from the following sectors:

Three Months Ended
March 31,
------------------------
2009 2008
----------- -----------
National defense and intelligence agencies $ 36,107 $ 40,946
Federal civilian agencies 12,194 6,634
Homeland security 12,804 1,326
State and local government agencies 5,817 5,244
Other 281 623
----------- -----------
$ 67,203 $ 54,773
=========== ===========

Revenues by contract type as a percentage of contract revenue were
as follows:

Three Months Ended
March 31,
------------------------
2009 2008
----------- -----------
Time and materials 46% 55%
Cost reimbursable 17 19
Fixed price, including service-type
contracts 37 26
----------- -----------
100% 100%
==== ====

Prime contract 72% 54%
Sub-contract 28 46
----------- -----------
100% 100%
==== ====

Three Months Ended
March 31,
------------------------
2009 2008
----------- -----------
Net cash provided by operating activities $ 3,366 $ 1,832
Capital expenditures $ 266 $ 402
Depreciation $ 784 $ 700
Bookings $ 57,392 $ 63,050

March 31, December 31,
2009 2008
----------- -----------
Funded backlog $ 142,148 $ 149,201
Employees 1,481 1,503

ATTACHMENT IV

DYNAMICS RESEARCH CORPORATION
NON-GAAP CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
(in thousands, except share and per share data)

Three Months Ended
March 31, 2008
------------------
Contract revenue $ 54,773
Product sales 1,705
------------------
Total revenue 56,478
------------------

Cost of contract revenue 46,212
Cost of product sales 1,605
------------------
Total cost of revenue 47,817
------------------

Gross profit on contract revenue 8,561
Gross profit (loss) on product sales 100
------------------
Total gross profit 8,661

Selling, general and administrative expenses 5,401
Amortization of intangible assets 509
------------------
Non-GAAP operating income 2,751
Interest expense, net (139)
Other expense, net (71)
------------------
Non-GAAP income before provision for income taxes 2,541
Non-GAAP provision for income taxes 1,102
------------------
Non-GAAP net income $ 1,439
==================

Earnings per common share
Basic $ 0.15
Diluted $ 0.15

Weighted average shares outstanding
Basic 9,436,054
Diluted 9,728,042

ATTACHMENT V

DYNAMICS RESEARCH CORPORATION
RECONCILIATION OF NON-GAAP MEASURES
(in thousands, except share and per share data)

Three Months Ended
March 31, 2008
------------------
GAAP operating loss $ (6,068)
Provision for litigation 8,819
------------------
Non-GAAP operating income $ 2,751
==================

GAAP loss before provision for income taxes $ (6,278)
Provision for litigation 8,819
------------------
Non-GAAP income before provision for income taxes $ 2,541
==================

GAAP benefit for income taxes $ (1,022)
Tax benefit for provision for litigation 2,124
------------------
Non-GAAP provision for income taxes $ 1,102
==================

GAAP net loss $ (5,256)
Provision for litigation, net of tax benefit 6,695
------------------
Non-GAAP net income $ 1,439
==================

Earnings (loss) per common share
GAAP Basic $ (0.56)
Per share effect of provision for litigation 0.71
------------------
Non-GAAP Basic $ 0.15
==================

GAAP Diluted $ (0.56)
Per share effect of provision for litigation 0.70
------------------
Non-GAAP Diluted $ 0.15
==================

GAAP Weighted average shares outstanding
Basic and diluted 9,436,054

Weighted average shares outstanding
Basic and GAAP diluted 9,436,054
Non-GAAP Diluted 9,728,042
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