Back to GetFilings.com





================================================================================

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

----------

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED MARCH 31, 2000

COMMISSION FILE NUMBER 1-8533

----------

DRS TECHNOLOGIES, INC.

----------

DELAWARE 13-2632319
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)


5 SYLVAN WAY, PARSIPPANY, NEW JERSEY 07054
(973) 898-1500

Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock, $.01 par value American Stock Exchange
9% Senior Subordinated Convertible
Debentures due October 1, 2003 American Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

The market value of shares of common stock held by non-affiliates, based on
the closing prices for such stock on the American Stock Exchange on June 19,
2000, was approximately $101,300,000. The number of shares of common stock
outstanding as of June 19, 2000 was 9,277,031 (exclusive of 440,939 shares of
common stock held in the treasury.)

DOCUMENTS INCORPORATED BY REFERENCE

1. 2000 Annual Report (for the fiscal year ended March 31, 2000), incorporated
in Part II.

2. Definitive Proxy Statement, dated June 28, 2000, for the Annual Meeting of
Stockholders, incorporated in Part III.

================================================================================


PART I

The following discussion and analysis contains certain forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements in this report are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Persons reading this report
are cautioned that risks and uncertainties are inherent to forward-looking
statements. Accordingly, the Company's actual results could differ materially
from those suggested by such forward-looking statements. Risks include, without
limitation, the effect of the Company's acquisition strategy on future operating
results; the uncertainty of acceptance of new products and successful bidding
for new contracts; the effect of technological changes or obsolescence relating
to the Company's products and services; the effects of government regulation or
shifts in government policy, as they may relate to the Company's products and
services; competition; and other matters referred to in this report.

ITEM 1. BUSINESS

GENERAL

DRS Technologies, Inc. ("DRS", the "Company", "we", "us", "our") is a
leading supplier of defense electronic systems. We provide advanced technology
products and services to government and commercial customers worldwide. Our
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, combat systems, data storage, digital imaging,
electro-optics, flight safety and space. Our defense electronics systems and
subsystems are sold to all branches of the U.S. military, selected U.S.
Government intelligence agencies, major aerospace/defense prime contractors,
international military forces and a wide range of commercial customers. We also
offer a full complement of technical support and advanced manufacturing
services.

Incorporated in 1968, DRS has served the defense industry for over thirty
years. We have increased our annual revenues at a compound annual growth rate of
approximately 42% over the last five years, and are currently a leading provider
of infrared night vision devices, combat display workstations, electronic sensor
systems, mission recorders and deployable flight incident recorders. Our
operating results directly reflect our strategies of maintaining our reputation
for technical excellence, focusing on the development of long-term contracts and
acquiring businesses that complement or extend our product lines.

COMPANY ORGANIZATION

We design and manufacture electronic systems for several of the U.S.
military's well-funded programs and high-profile platforms. We operate in three
principal business segments on the basis of products and services offered. Each
operating unit is comprised of separate and distinct businesses: the Electronic
Systems Group (ESG), the Electro-Optical Systems Group (EOSG) and the Flight
Safety and Communications Group (FSCG). All other operations are grouped in
"Other."

Financial information on our reportable business segments is presented in
Note 13 to our Consolidated Financial Statements, which are incorporated by
reference in this Form 10-K (see Item 14 - Exhibits, Financial Statement
Schedules and Reports on Form 8-K). Additional financial data and commentary on
the results of operations for the reportable segments are included in
Management's Discussion and Analysis of Financial Condition and Results of
Operations, which is also incorporated by reference in this Form 10-K (see Item
7 - Management's Discussion and Analysis of Financial Condition and Results of
Operations). These data and comments should be referred to in conjunction with
the summary description of our business segments which follows:

ELECTRONIC SYSTEMS GROUP

ESG is a leading provider of naval computer workstations used to process
and display integrated combat information. ESG produces rugged computers and
peripherals, surveillance, radar and tracking systems, acoustic signal
processing and display equipment, and combat control systems for U.S. and
international military organizations. ESG performs field service and depot level
repairs for its products, as well as other manufacturers' systems, and also
provides systems and software engineering support to the U.S. Navy for the
testing of shipboard combat systems. ESG products are used on front-line
platforms, including Aegis destroyers and cruisers, aircraft carriers,
submarines and surveillance aircraft. ESG's products also are used in the U.S.
Army's ongoing battlefield digitization programs. ESG markets directly to
various U.S. Government agencies, primarily in the intelligence community, and
has teamed with leading corporations, such as General Dynamics and Booz-Allen.

ESG's major products and services include:

o AN/UYQ-70: AN/UYQ-70 Advanced Display Systems are advanced,
open-architecture display systems designed for widespread application
through software and hardware modification for deployment on Aegis and
other surface ships, submarines and airborne platforms. These systems are
self-contained, microprocessor-based units complete with interface software
and offer advanced computing and graphic capabilities. These units replace
previous generation units that are dependent upon a shipboard computer at
approximately 25% of the cost of the legacy systems. These systems were
developed for the U.S. Navy under a subcontract with Lockheed Martin
Tactical Defense Systems. Based upon the size of the Naval surface,
subsurface and air fleets and the average number of workstations to be
deployed on each, we believe


2



that the potential market for these workstations may exceed 5,000 units
over the next decade. Revenues from the AN/UYQ-70 program accounted for
approximately 21% of total consolidated revenues for the year ended March
31, 2000.

o Military Display Emulators: These workstations are functionally identical
to existing U.S. Navy shipboard display consoles built to military
specifications, but are manufactured using low-cost commercial
off-the-shelf (COTS) components suitable for land-based environments. These
Military Display Emulators are used in U.S. Navy development, test and
training sites as plug-compatible replacements for the more expensive
shipboard qualified units.

o AN/SPS-67: AN/SPS-67 Radar Systems are being deployed on the U.S. Navy's
new DDG-51 Aegis class ships, Spanish Navy's F-100 class ships and other
international naval forces. They provide ocean surveillance and navigation
data, including detection and tracking of low flying aircraft and other
targets. An integral part of the ships' command and control combat system,
the AN/SPS-67 has a potential market application on other surface ships in
the Navy's fleet, as well as on aircraft carriers and amphibious operation
assault ship platforms.

o AN/SQR-17A(V)3: The AN/SQR-17A(V)3 Mobile In-shore Undersea Warfare (MIUW)
system is a multi-sensor processing system that is deployed in land-based
vans, utilizing sonobuoys and sensor string array passive detectors for
harbor defense, coastal defense and amphibious operations surveillance, as
well as for the enhancement of drug interdiction efforts. These systems
currently are being procured for use in 22 field installations. We are under
contract to provide the system's underwater sensor string arrays and other
upgrades to these field installations.

o The Explorer (often referred to as the CCU, Compact Computer Unit): The
Explorer provides the full capabilities for the Common Hardware/Software
(CHS)-2 program in a portable, self-contained unit with its own power source
and an integrated flat panel display. The unit uses exchangeable media (hard
disks and tape units) and provides compatibility of information and system
security. The unit shares its design with the Explorer 2 and is being
complemented with an upgraded version with a larger display and greater
capabilities.

o The Genesis 300 rugged multi-platform computer: The Genesis 300, a
variant of the Genesis SR (short rack), features an integrated 12-inch
screen and keyboard. Since its launch in 1997, the Genesis SR, which
supports applications such as mission planning, tactical communications,
combat support and logistics support, has been sold into military programs
in Europe and Southeast Asia.

o Custom-packaged integrated computer systems for deployment in land
vehicles, ships, shelters and other demanding environments, including
unique physical packaging requirements such as compact size, low weight,
specialized air flow and rack mounting.


3



o The design and integration of special-purpose systems configured
specifically for a variety of target applications, including:
communications processing; data acquisition, storage and forwarding;
digital signal processing; and client/server systems and embedded
processing. In addition, ESG provides specially packaged monitors,
keyboards, printers and peripheral subsystems that are used in conjunction
with its computer systems.

o Electronic Manufacturing and Systems Integration Services: ESG is an
experienced provider of manufacturing, test and product support services and
performs contract manufacturing services for various aerospace and military
applications.

ELECTRO-OPTICAL SYSTEMS GROUP

EOSG produces systems and subsystems for infrared night vision and
targeting products used in some of the U.S. Army's most important battlefield
platforms, including the Abrams Main Battle Tank, Bradley Infantry Fighting
Vehicle and the HMMWV scout vehicle. EOSG designs, manufactures and markets
products that allow operators to detect, identify and target objects based
upon their infrared signatures regardless of the ambient light level. This
Group is also a designer and manufacturer of eye-safe laser range finders and
multiple-platform weapons calibration systems for such diverse air platforms
as the Apache attack helicopter and AC-130U gunship. EOSG is leveraging its
technology base by expanding into related non-defense markets and
manufactures electro-optical modules for a commercial device used in
corrective laser eye surgery.

EOSG's major products and contracts include:

o Horizontal Technology Integration Second Generation Forward Looking
Infrared (FLIR), thermal imaging systems (HTI SGF Thermal Imaging Systems)
installed on the U.S. Army's Abrams, Bradleys and HMMWV Scouts. Revenues
from the HTI SGF Thermal Imaging Systems program accounted for
approximately 14% of total consolidated revenues for the year ended March
31, 2000.

o Improved Bradley Acquisition System (IBAS), which provides the thermal
imaging and fire control system installed on Bradleys.

o Long Range Advanced Scout Surveillance System (LRAS3), the thermal
imaging sighting systems on the HMMWV scouts.

o Day/Night Vision Binoculars: EOSG is currently under contract to develop
and manufacture these units for the Israeli military. The Nightstar(TM)
night vision binocular is a hand-held viewing binocular that incorporates
an image intensifier tube, laser range finder and digital compass in a
compact lightweight system suited for infantry units, special forces and
night operations involving forward observers and reconnaissance patrols.
Nightstar(TM) displays range and azimuth data in the soldier's eyepiece,
allowing identification of targets and providing essential fire support
data for nighttime engagement. These units have a range of 20 to 2,000
meters.

o Gunners' Auxiliary Sight: This is an electro-optical device used as a
primary or secondary sighting system on Abrams M1 Main Battle Tanks and
contains a very sophisticated electro-optical device and a laser protective
filter. EOSG has produced more than 2,000 of these instruments and
continues to operate as a repair and retrofit facility for the M1A2 upgrade
program. Options for additional units under this program may be exercised
through fiscal 2001.

o Tube-launched Optically-tracked Wire-guided (TOW) Optical Sight: EOSG is
currently the only U.S. qualified producer of two of the three critical
assemblies in the TOW missile launcher. This complex electro-optical system
is the main component of this premier ground antitank weapons system.

o Infrared scanning Focal Plane Arrays (FPAs), staring FPAs and linear
coolers: FPAs, staring FPAs and linear coolers are designed to maintain
optimal operating temperatures for infrared scanning for military
electro-optical systems applications. An FPA is a two-dimensional assembly
of electro-optical detecting pixels used to generate night vision
capability. FPAs are also used in heat-seeking missile guidance systems and
missile warning systems, applications for which no pictorial image is
required.

o JASSM: EOSG provides the infrared detector module for the Joint Air to
Surface Missile being developed by Lockheed Martin for the U.S. Air Force
and Navy. The infrared detector module guides the JASSM Cruise Missile into
the pre-flight designated target during the final moments of the flight.
The JASSM program is in the engineering manufacturing development phase,
with production beginning in 2001.

o Standard Advanced Dewar Assembly II Detector (SADA): SADA is the
specified detector dewar cooler module procured by the U.S. Army for its
horizontal Technology Integration (HTI) program for use in the Second
Generation night vision equipment upgrades on the MIA2 Abrams Tank and the
Bradley Fighting Vehicle. The HTI upgrade greatly increases the range
performance of these systems for our soldiers.

o Multiple Platform Boresighting Equipment (MPBE): MPBE currently is used on
the U.S. Army's Apache helicopters and Apache Longbow helicopters, the
Marine Corps' Cobra helicopters, and the Air Force's AC-130 Spectre gunship
radar as well as aircraft of international military forces. Boresighting
equipment is used to align and harmonize the navigation, targeting and
weapons systems on rotary- and fixed-wing aircraft. This technology is
proprietary to the Company.



4



FLIGHT SAFETY AND COMMUNICATIONS GROUP

FSCG is a leading manufacturer of deployable flight emergency or "black
box" recording equipment. These complete emergency avionics systems combine the
functionality of a crash locator beacon with a flight incident recorder for
search, recovery and crash analysis. This Group uses advanced commercial
technology in the design and manufacture of multi-sensor digital, analog and
video data capture and recording products, as well as high-capacity data storage
devices for harsh aerospace and defense environments. FSCG also manufactures
shipboard communications and infrared laser warning and range finder displays
for Canadian and other foreign navies. FSCG is also a leading manufacturer of
ultra high-speed digital imaging systems.

FSCG's major products and services include:

o Emergency Avionics System 3000 (EAS3000): The EAS3000 is an integrated
in-flight data recorder, cockpit voice recorder and emergency locator
beacon system constructed in a modular, deployable and crash-survivable
package, designed to withstand intensive destructive forces. Mounted on the
outside of a helicopter, the EAS3000 provides the immediate location of an
accident site, allowing early rescue of survivors and recovery of vital
flight and cockpit voice data. FSCG provides the EAS3000 for use on UK
EH-101 helicopters and its variants, as well as on the Italian MMI,
Canadian Cormorant, Tokyo Metropolitan Police and other military and search
and rescue helicopters. FSCG also developed a version of the EAS3000, known
as EAS3000F, for use on fixed-wing aircraft.

o Deployable Flight Incident Recorders: Designed to withstand the intense
destructive forces associated with an aircraft crash, deployable flight
incident recorders are mounted beneath the airframe skin. Deployment
commands provided by the switch activation trigger release the unit and
activate the recorder. These systems also contain crash locator
beacons. They have been installed successfully on fighter aircraft, such as
the German Tornado and the U.S. Navy F/A-18 Hornet, and are used to record
both flight and voice data.

o Aircraft Crash Locator Beacons: Consisting of a composite airfoil which
encloses a radio transmitter and power source, crash locator beacons are
designed to deploy and activate either before or upon impact. Used
primarily on fixed-wing military aircraft, these crash position locators
enable the rapid location of downed aircraft and timely rescue of
survivors.

o Integrated Shipboard Communications Systems: Using the latest available
technology and COTS-based designs, FSCG produces integrated digital
shipboard communications systems which provide single-button access to
tactical interior, exterior and secured channels for joint operations.
These Shipboard Integrated Communications (SHINCOM) systems improve
communication efficiency by eliminating the need for multiple
single-purpose communications systems, thus providing a comprehensive
system solution. FSCG's SHINCOM systems are capable of handling shipboard
interior communications; communications with other aircraft, surface and
undersea vessels; and UHF/VHF and broadband communications via satellite
with shore stations and cooperating units. These systems are used aboard
the Canadian Iroquois class ships and the U.S.S. George Washington aircraft
carrier. FSCG also provides data link components and systems, modems,
digital telephone and radar surveillance systems.

o Electronic Manufacturing and Systems Integration Services: FSCG is an
experienced provider of manufacturing, test and product support services
and performs contract manufacturing services for various aerospace,
military and space applications. FSCG's manufacturing expertise and
capabilities include:

o surface mount and through-hole multi-layer computer circuit
assemblies (CCAs);

o harness fabrication;

o power supply assembly and testing;

o motherboard assembly and testing; and

o systems integration services.

o WRR-818: This ruggedized airborne video recorder captures various sensor
and video data on the U.S. Navy's F/A-18 and on the U.S. Air Force's
A/OA-10A aircraft. The U.S. Army also has selected it for use in its Kiowa
Warrior attack helicopters. A similar recorder, the WRR-812, has been
adapted for use in the Canadian Army's Light Armored Reconnaissance
Vehicles.


5



o DCMR-24 and 100: These are digital cassette mission recorders that use
high-capacity digital tape formats (DTF)under license by Sony Corporation.
Incorporating DTF technology, FSCG produces the Acoustic Data Recorder for
U.S. Navy P-3C patrol aircraft.

o Framing Cameras: Framing cameras have the ability to take a sequence of
pictures at the same location at very high speeds. These cameras are
designed to produce images at equivalent speeds of several million pictures
per second, although in practice 4-8 frames are taken. Framing cameras are
used primarily for research in the areas of electrical breakdown/discharge,
ballistics, detonics and combustion.

o Electronic Ballistic Range Cameras: These cameras use digital imaging to
capture a single picture of a projectile in flight. Slower than framing
cameras but with better resolution, these cameras are used in the
development and proof testing of ballistics.

OTHER

Other includes the activities of the parent company, DRS Corporate
Headquarters, DRS Ahead Technology, Inc. (DRS Ahead) and certain non-operating
subsidiaries of the Company. DRS Ahead produces magnetic head components used in
the manufacturing process of computer disk drives, which burnish and verify the
quality of disk surfaces. DRS Ahead also services and manufactures video
heads used in broadcast television equipment.

STRATEGY

Our goal is to secure our emerging position as a mid-tier defense
technology supplier by maintaining our reputation for technical excellence,
focusing on the development of profitable long-term contracts and acquiring
businesses that complement or extend our product lines.

o Leverage Existing Contracts to Win New Business. Our experience has shown
that high levels of performance on existing contracts provide contractors
with valuable exposure to decision makers within the government procurement
staff and greatly enhance the prospects of obtaining new or follow-on
contracts. We intend to continue to leverage our high level of performance
on our extensive range of existing contracts across entire program life
cycles to help us obtain new and follow-on contracts.

o Obtain New Development Contracts. Customer-funded development contracts
offer us the opportunity to work with our military customers to design and
manufacture new systems and components that provide highly customized
solutions to our customers' procurement needs, while minimizing our
financial risk. An important element of our success will continue to be our
ability to win new development contracts to maintain our backlog of funded
programs.

o Pursue Selective Acquisitions. Historically, we have pursued acquisitions
of complementary businesses with leading positions in product or market
areas that are synergistic with our existing business. We believe that such
acquisitions offer the opportunity to acquire new technologies and
customers, thereby leveraging our core strengths. The acquisition of
existing contracts provides us with both current income and the opportunity
for future contract awards based upon our performance.

o Build Strategic Alliances in the U.S. and Abroad. We pursue alliances
with companies whose core competencies are synergistic with ours, from a
product, as well as technological, point of view. In this way we can expand
our produt offerings and market penetration in the U.S. and abroad.

Our profitability in the defense electronics industry is due in part to our
focus on managing our financial risk with respect to the development and
fabrication of new products. Many of our research and development projects are
performed with funding obtained from the military customer under development
contracts. In fact, in fiscal year 2000, we received approximately $23.5 million
in research and development funding from our customers. In addition, when a
system enters into full production, the terms of many of our production
contracts provide for progress payments or milestone payments. This allows us to
fund a portion of our working capital requirements from external sources and
reduce our financial risk.


6



DISCONTINUED OPERATIONS

The Company entered into an agreement dated as of May 10, 2000 to sell our
magnetic tape head business units located in St. Croix Falls, Wisconsin, and
Razlog, Bulgaria. The St. Croix Falls and Bulgarian operations produce primarily
magnetic tape recording heads for transaction products that read data from
magnetic cards, tapes and ink. We anticipate that the sale will be completed in
the second quarter of fiscal 2001. The pending sale of the magnetic tape
business represents a strategic decision by us to focus our resources on our
core businesses. We have restated our financial statements to present the
operating results of these business units as a discontinued operation.

RECENT ACQUISITIONS

On July 21, 1999, we acquired Global Data Systems Ltd. and its
wholly-owned subsidiary, European Data Systems Ltd., located in Chippenham,
Wiltshire, the United Kingdom, for approximately $7.8 million in cash and
potential future consideration. This acquisition enabled us to expand our
presence in the rugged computer and peripheral product market and add backlog in
complementary product areas.

On June 14, 2000, we acquired the assets of General Atronics Corporation
for approximately $11.0 million in cash and stock. Located in Wyndmoor,
Pennsylvania, and now operating as DRS Communications Company, LLC, the company
designs, develops and manufactures military data link components and systems,
high-frequency communication modems, tactical and secure digital telephone
components, and radar surveillance systems for U.S. and international
militaries.

CUSTOMERS

We sell a significant portion of our products to agencies of the U.S.
Government, primarily the Department of Defense, to foreign government agencies
or to prime contractors or their subcontractors. Approximately 80%, 81% and 78%
of total consolidated revenues for fiscal 2000, 1999 and 1998, respectively,
were derived directly or indirectly from defense contracts for end use by the
U.S. Government and its agencies. See "Foreign Operations and Export Sales"
below for information concerning sales to foreign governments.

BACKLOG

The following table sets forth our backlog by major product group
(including enhancements, modifications and related logistics support) at the
dates indicated.

"Backlog" refers to the aggregate revenues remaining to be earned at a
specified date under contracts held by us, including, for U.S. Government
contracts, the extent of the funded amounts thereunder which have been
appropriated by Congress and allotted to the contract by the procuring
Government agency. Backlog also includes all firm orders for commercial
products. Fluctuations in backlog generally relate to the timing and amount of
defense contract awards.


7




MARCH 31, 2000 MARCH 31, 1999 MARCH 31, 1998
--------------- --------------- ---------------

Government Products:
U.S. Government.......................... $ 303,600,000 $ 293,400,000 $ 141,500,000
Foreign Government....................... 56,200,000 48,400,000 24,900,000
--------------- --------------- ---------------
359,800,000 341,800,000 166,400,000
Commercial Products....................... 28,300,000 20,900,000 8,500,000
--------------- --------------- ---------------
$ 388,100,000 $ 362,700,000 $ 174,900,000
============== ============== ==============


At March 31, 2000, our backlog of orders was approximately $388.1 million
compared with $362.7 million at March 31, 1999. The increase in backlog was due
primarily to increased bookings, most notably for display workstations and
infrared sighting and targeting systems, offset, in part, by the effect of
increased revenues. New contract awards of approximately $406.0 million were
booked during the fiscal year ended March 31, 2000. Approximately 71% of backlog
as of March 31, 2000 is expected to result in revenues during fiscal 2001.

RESEARCH AND DEVELOPMENT

The defense electronics sector is subject to rapid technological changes,
and our future success will depend in large part upon our ability to improve
existing product lines and to develop new products and technologies in the same
or related fields. Thus, our technological expertise is an important factor
affecting our growth. A portion of our research and development activities take
place in connection with customer-sponsored research and development contracts.
We recorded revenues for customer-sponsored research and development of
approximately $23.5 million, $15.4 million, and $11.8 million for fiscal 2000,
1999 and 1998, respectively. Such customer-sponsored activities are primarily
the result of contracts directly or indirectly with the U.S. Government. We also
invest in internal research and development (IR&D). Such expenditures were
approximately $9.9 million, $5.2 million, and $4.0 million for fiscal 2000, 1999
and 1998, respectively.

CONTRACTS

Our contracts are normally for production, service or development.
Production and service contracts are typically of the fixed-price variety with
development contracts currently of the cost-type variety. Because of their
inherent uncertainties and consequent cost overruns, historically, development
contracts have been less profitable than production contracts.

Fixed-price contracts may provide for a firm fixed price or they may be
fixed-price incentive contracts. Under the firm fixed-price contracts, we agree
to perform for an agreed-upon price. Accordingly, we derive benefits from cost
savings, but bear the risk of cost overruns. Under the fixed-price incentive
contracts, if actual costs incurred in the performance of the contracts are less
than estimated costs for the contracts, the savings are apportioned between the
customer and us. If actual costs under such a contract exceed estimated costs,
however, excess costs are apportioned between the customer and us, up to a
ceiling. We bear all costs that exceed the ceiling, if any.

Cost-type contracts typically provide for reimbursement of allowable costs
incurred plus a fee (profit). Unlike fixed-price contracts in which we are
committed to deliver without regard to performance cost, cost-type contracts
normally obligate us to use our best efforts to accomplish the scope of work
within a specified time and a stated contract dollar limitation. In addition,
U.S. Government procurement regulations mandate lower profits for cost-type
contracts because of our reduced risk. Under cost-plus-incentive-fee contracts,
the incentive may be based on cost or performance. When the incentive is based
on cost, the contract specifies that we are reimbursed for allowable incurred
costs plus a fee adjusted by a formula based on the ratio of total allowable
costs to target cost. Target cost, target fee, minimum and maximum fee and
adjustment formulae are agreed upon when the contract is negotiated. In the case
of performance-based incentives, we are reimbursed for allowable incurred costs
plus an incentive, contingent upon meeting or surpassing stated performance
targets. The contract provides for increases in the fee to the extent that such
targets are surpassed and for decreases to the extent that such targets are not
met. In some instances, incentive contracts also may include a combination of
both cost and performance incentives. Under cost-plus-fixed-fee contracts, we
are reimbursed for costs and receive a fixed fee, which is negotiated and
specified in the contract. Such fees have statutory limits.


8



The percentages of revenues during fiscal 2000, 1999 and 1998 attributable
to our contracts by contract type were as follows:

FISCAL YEARS ENDED MARCH 31,
----------------------------
2000 1999 1998
---- ---- ----
Firm fixed-price.................... 88% 84% 87%
Cost-plus-incentive fee............. 1% 1% 3%
Cost-plus-fixed fee................. 11% 15% 10%

The consistent percentage and continued predominance of firm fixed-price
contracts are reflective of the fact that production contracts comprise a
significant portion of our U.S. Government contract portfolio.

We negotiate for and generally receive progress payments from our customers
of between 75-90% of allowable costs incurred on the previously described
contracts. Included in our reported revenues are certain amounts which we have
not billed to customers. These amounts, approximately $13.9 million, $14.8
million and $7.6 million as of March 31, 2000, 1999 and 1998, respectively,
consist of costs and related profits, if any, in excess of progress payments for
contracts on which sales are recognized on a percentage-of-completion basis.

Under generally accepted accounting principles, all U.S. Government
contract costs, including applicable general and administrative expenses, are
charged to work-in-progress inventory and are written off to costs and expenses
as revenues are recognized. The Federal Acquisition Regulations (FAR),
incorporated by reference in U.S. Government contracts, provide that internal
research and development costs are allowable general and administrative
expenses. To the extent that general and administrative expenses are included in
inventory, research and development costs also are included. Unallowable costs,
pursuant to the FAR, are excluded from costs accumulated on U.S. Government
contracts. Work-in-process inventory included general and administrative costs
(which include internal research and development costs) of $12.7 million and
$13.6 million at March 31, 2000 and 1999, respectively.

Our defense contracts and subcontracts are subject to audit, various profit
and cost controls, and standard provisions for termination at the convenience of
the customer. Multiyear U.S. Government contracts and related orders are subject
to cancellation if funds for contract performance for any subsequent year become
unavailable. In addition, if certain technical or other program requirements are
not met in the developmental phases of the contract, then the follow-on
production phase may not be realized. Upon termination other than for a
contractor's default, the contractor normally is entitled to reimbursement for
allowable costs, but not necessarily all costs, and to an allowance for the
proportionate share of fees or earnings for the work completed.

COMPETITION

Our products are sold in markets containing competitors which are
substantially larger than we are, devote substantially greater resources to
research and development and generally have greater financial resources. Certain
competitors are also our customers and suppliers. The extent of competition for
any single project generally varies according to the complexity of the product
and the dollar volume of the anticipated award. We believe that we compete on
the basis of the performance of our products, our reputation for prompt and
responsive contract performance, and our accumulated technical knowledge and
expertise. Our future success will depend in large part upon our ability to
improve existing product lines and to develop new products and technologies in
the same or related fields.

In the military sector, we compete with large and mid-tier defense
contractors on the basis of product performance, cost, overall value, delivery
and reputation. As the size of the overall defense industry has decreased in
recent years, the number of consolidations and mergers of defense suppliers has
increased. We expect this consolidation trend to continue. As the industry
consolidates, the large defense contractors are narrowing their supplier base
and awarding increasing portions of projects to strategic mid- and lower-tier
suppliers, and, in the process, are becoming oriented more toward system
integration and assembly. We believe that we have benefited from this trend, as
evidenced by the formation of strategic alliances with several large suppliers.

PATENTS AND LICENSES

We have patents on certain of our commercial and data recording products,
semi-conductor devices, rugged computer related items, and electro-optical and
focal plane array products. DRS and its subsidiaries have certain


9



registered trademarks, none of which are considered significant to current
operations. We believe our patent position and intellectual property portfolio,
in the aggregate, is valuable to our operations. We do not believe that the
conduct of our business as a whole is materially dependent on any single patent,
trademark or copyright.

MANUFACTURING AND SUPPLIERS

Our manufacturing processes for our products, excluding certain
electro-optical products, includes the assembly of purchased components and
testing of products at various stages in the assembly process. Purchased
components include integrated circuits, circuit boards, sheet metal fabricated
into cabinets, resistors, capacitors, semiconductors, silicon wafers and other
conductive materials, insulated wire and cables. In addition, many of our
products use machined castings and housings, motors and recording and
reproducing heads. Many of the purchased components are fabricated to our
designs and specifications. The manufacturing process for certain of our optics
products includes the grinding, polishing and coating of various optical
materials and the machining of metal components.

Although materials and purchased components generally are available from a
number of different suppliers, several suppliers are our sole source of certain
components. If a supplier should cease to deliver such components, other sources
probably would be available; however, added cost and manufacturing delays might
result. We have not experienced significant production delays attributable to
supply shortages, but occasionally experience quality and other related problems
with respect to certain components, such as semiconductors and connectors. In
addition, with respect to our optical products, certain exotic materials, such
as germanium, zinc sulfide and cobalt, may not always be readily available.

FOREIGN OPERATIONS AND EXPORT SALES

We currently sell several of our products and services in the international
marketplace to Canada, Israel, the Republic of China, Spain, Australia, and
other countries in Europe and Southeast Asia. Foreign sales are derived under
export licenses granted on a case-by-case basis by the United States Department
of State. Our foreign contracts generally are payable in United States dollars.
Export sales accounted for 10% or less of total revenues in the fiscal years
ended March 31, 2000 and 1999.

We operate outside the United States through FSCG in Canada and the United
Kingdom, and through ESG primarily in the United Kingdom. The information
required by this item with respect to revenues and long-lived assets by
geographic area is incorporated by reference herein to pages 49-50 of the DRS
2000 Annual Report (for the fiscal year ended March 31, 2000).

The addition of international businesses involves additional risks for us,
such as exposure to currency fluctuations, future investment obligations and
changes in foreign economic and political environments. In addition,
international transactions frequently involve increased financial and legal
risks arising from stringent contractual terms and conditions and widely
different legal systems, customs and practices in foreign countries.


10





EXECUTIVE OFFICERS OF THE REGISTRANT

EXECUTIVE OFFICERS

The names of our executive officers, their positions and offices with us,
and their ages are set forth below:




NAME AGE POSITION
- ---- --- --------

Mark S. Newman...................... 50 Chairman of the Board, President and Chief Executive Officer

Paul G. Casner, Jr.................. 62 Executive Vice President, Chief Operating Officer

Nina Laserson Dunn.................. 53 Executive Vice President, General Counsel and Secretary

Richard A. Schneider................ 47 Executive Vice President, Chief Financial Officer and Treasurer

MARK S. NEWMAN has been employed by us since 1973. He was named Vice
President, Finance, Chief Financial Officer and Treasurer in 1980 and Executive
Vice President in 1987. Mr. Newman became a Director of DRS in 1988. In May
1994, Mr. Newman became the President and Chief Executive Officer of DRS and in
August 1995 became Chairman of the Board.

PAUL G. CASNER, JR. joined DRS in 1993 as President of Technology
Applications and Service Company, now DRS Electronic Systems, Inc. In 1994, he
became President of the DRS Electronic Systems Group and a Vice President of
DRS. In 1998, he became Executive Vice President, Operations, and in May 2000 he
became our Executive Vice President, Chief Operating Officer. Mr. Casner has
over 30 years of experience in the defense electronics industry and has held
positions in engineering, marketing and general management.

NINA LASERSON DUNN joined us as Executive Vice President, General Counsel
and Secretary in July 1997. Prior to joining DRS, Ms. Dunn was a director in the
corporate law department of Hannoch Weisman, a Professional Corporation, where
she served as our outside legal counsel. Ms. Dunn is admitted to practice law in
New York and New Jersey and is a member of the American, New York State and New
Jersey State Bar Associations.

RICHARD A. SCHNEIDER joined us in 1999 as Executive Vice President, Chief
Financial Officer and Treasurer of DRS. He held similar positions at NAI
Technologies, Inc. (NAI) and was a member of its Board of Directors prior to its
acquisition by DRS in February 1999. Mr. Schneider has over 20 years of
experience in corporate financial management, including ten years with NAI.

EMPLOYEES

At March 31, 2000, we had approximately 2,000 employees (excluding
employees at our discontinued operations), 1,529 of whom were located in the
United States. None of our employees are represented by labor unions, and we
have experienced no work stoppages. There is a continuing demand for qualified
technical personnel, and we believe that our future growth and success will
depend upon our ability to attract, train and retain such personnel.


11



ITEM 2. PROPERTIES

We lease the following properties (excluding two leased properties of our
magnetic tape head businesses - see Discontinued Operations above):



APPROXIMATE
SQUARE
DIVISION LOCATION ACTIVITIES FOOTAGE LEASE EXPIRATION
---------------------------- ----------------------------------------------- ----------------------------------

CORPORATE Parsippany, New Jersey Corporate 18,900 Fiscal 2003
Headquarters

ESG Gaithersburg, Maryland Administrative, 42,500 Fiscal 2006
Engineering and
Manufacturing

ESG Johnstown, Pennsylvania Administrative 130,000 Fiscal 2011
and Manufacturing

ESG San Diego, California Engineering 5,000 Fiscal 2001
Support Services

ESG Chesapeake, Virginia Field Service 22,000 Fiscal 2005
and Engineering
Support

ESG Columbia, Maryland Administrative, 25,000 Fiscal 2002
Engineering and
Manufacturing

ESG Farnham, Surrey, Administrative, 26,000 Fiscal 2015
United Kingdom Engineering and
Manufacturing

ESG Chippenham, Wiltshire, Administrative, 35,500 Fiscal 2002
United Kingdom Engineering and
Manufacturing

EOSG Oakland, New Jersey Administrative, 36,000 Fiscal 2003
Engineering and
Manufacturing

EOSG Palm Bay, Florida Administrative, 85,200 Fiscal 2006
Engineering and
Manufacturing

EOSG Melbourne, Florida Administrative, 93,500 Fiscal 2011
Engineering and
Manufacturing



12




APPROXIMATE
SQUARE
DIVISION LOCATION ACTIVITIES FOOTAGE LEASE EXPIRATION
- ---------------------------- -------------------------- -------------------- ---------------- -----------------

EOSG Dallas, Texas Administrative, 109,600 Fiscal 2003
Engineering and
Manufacturing

EOSG Torrance, California Administrative, 35,000 Fiscal 2009
Engineering and
Manufacturing
Fiscal 2004
FSCG Nepean, Ontario, Administrative and 8,000
Canada Engineering

FSCG Santa Clara, California Administrative, 32,700 Fiscal 2006
Engineering and
Manufacturing

OTHER San Jose, California Administrative, 32,000 Fiscal 2001
Product
Development and
Manufacturing


We own the following properties (excluding an owned facility in Razlog,
Bulgaria, which will be sold as part of our pending sale of our magnetic tape
head businesses - See Discontinued Operations in Item 1):




SUBSIDIARY APPROXIMATE
OR SQUARE
DIVISION LOCATION ACTIVITIES FOOTAGE
- ---------------------------- -------------------------- -------------------- -------------------

FSCG Carleton Place, Ontario, Administrative and 128,500
Canada Manufacturing

FSCG Tring, Hertfordshire, Administrative, 7,500
United Kingdom Engineering and
Manufacturing

We believe that all our facilities are in good condition, adequate for our
intended use and sufficient for our immediate needs. It is not certain whether
we will negotiate new leases as existing leases expire. Such determinations will
be made as existing leases approach expiration and will be based on an
assessment of our requirements at that time. Further, we believe that we can
obtain additional space, if necessary, based on prior experience and current
real estate market conditions.

Substantially all of our assets, including those properties identified
above, are pledged as collateral on our borrowings (see Note 9 of Notes to
Consolidated Financial Statements).

ENVIRONMENTAL PROTECTION

We believe that our manufacturing operations and properties are, in all
material respects, in compliance with existing federal, state and local
provisions enacted or adopted to regulate the discharge of materials into the
environment or otherwise protect the environment. Such compliance has been
achieved without material effect on our earnings or competitive position.


13


ITEM 3. LEGAL PROCEEDINGS

We are a party to various legal actions and claims arising in the ordinary
course of our business. In our opinion, we have adequate legal defenses for each
of the actions and claims, and we believe that their ultimate disposition will
not have a material adverse effect on our consolidated financial position or
results of operations.

In April and May 1998, subpoenas were issued to the Company by the United
States Attorney for the Eastern District of New York seeking documents related
to a governmental investigation of certain equipment manufactured by DRS
Photronics, Inc. (Photronics). These subpoenas were issued in connection with
United States v. Tress, a case involving a product substitution allegation
against an employee of Photronics. On June 26, 1998, the complaint against the
employee was dismissed without prejudice. Although additional subpoenas were
issued to the Company on August 12, 1999 and May 10, 2000, to date, no claim has
been made against the Company or Photronics. During the Government's
investigation, until October 29, 1999, Photronics was unable to ship certain
equipment related to the case, resulting in delays in the Company's recognition
of revenues. On October 29, 1999, Photronics received authorization to ship its
first boresight system since the start of investigation. At this time, however,
the Company is unable to quantify the effect of the delayed shipments on its
future operations or financial position, or to predict when regular shipments
ultimately will resume, although the delays are expected to continue to impact
the Company's fiscal year 2001 results.

We are presently involved in a dispute in arbitration with Spar Aerospace
Limited (Spar) with respect to the working capital adjustment, if any, provided
for in the purchase agreement between the Company and Spar dated as of September
19, 1997, pursuant to which we acquired, through certain of our subsidiaries,
certain assets of Spar (see Note 4 of Notes to Consolidated Financial
Statements). We are also involved in a dispute with Raytheon Company with
respect to the working capital adjustment, if any, provided for in the purchase
agreement between the Company and Raytheon dated as of July 28, 1998, pursuant
to which we acquired, through certain subsidiaries, certain assets of Raytheon
(see Note 4 of Notes to Consolidated Financial Statements).

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.


14



PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

We have not paid any cash dividends since 1976. We intend to retain future
earnings for use in our business and do not expect to declare cash dividends on
our Common Stock in the foreseeable future. The indenture relating to the our 9%
Senior Subordinated Convertible Debentures and our bank borrowings restrict our
ability to pay dividends or make other distributions on our Common Stock. See
Note 9 of Notes to Consolidated Financial Statements for information concerning
restrictions on the declaration or payment of dividends. Any future declaration
of dividends will be subject to the discretion of our Board of Directors. The
timing, amount and form of any future dividends will depend, among other things,
on our results of operations, financial condition, cash requirements, plans of
expansion and other factors deemed relevant by our Board of Directors.

The common stock of DRS is traded on the American Stock Exchange under the
symbol "DRS." The information required by this item with respect to the market
prices for and number of holders of our common equity securities is incorporated
herein by reference to page 51 of the DRS 2000 Annual Report (for the fiscal
year ended March 31, 2000).

ITEM 6. SELECTED FINANCIAL DATA

The information required by this item is incorporated by reference herein
to page 20 of the DRS 2000 Annual Report (for the fiscal year ended March 31,
2000).

ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The information required by this item is incorporated by reference herein
to pages 21 through 30 of the DRS 2000 Annual Report (for the fiscal year ended
March 31, 2000).

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information required by this item is incorporated by reference herein
to page 30 of the DRS 2000 Annual Report (for the fiscal year ended March 31,
2000).

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is incorporated by reference herein
to pages 31 through 51 of the DRS 2000 Annual Report (for the fiscal year ended
March 31, 2000).

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not Applicable.


15



PART III

The information required by Items 10. through 13. of this Part is
incorporated herein by reference to our Definitive Proxy Statement, dated June
28, 2000, for the 2000 Annual Meeting of Stockholders. Reference also is made to
the information under "Executive Officers of the Registrant" in Part I of this
report.


16



PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Documents filed as part of this report

1. Financial Statements

The following financial statements of DRS and its subsidiaries
have been incorporated by reference to the DRS 2000 Annual Report (for
the fiscal year ended March 31, 2000), pursuant to Item 8 of this
report:




2000 ANNUAL REPORT PAGE(S)
------------------ -------

Independent Auditors' Report 51

Consolidated Balance Sheets--March 31, 2000 and 1999 31

Consolidated Statements of Earnings--Years Ended March 31,
2000, 1999 and 1998 32

Consolidated Statements of Stockholders' Equity and Comprehensive
Earnings--Years Ended March 31, 2000, 1999 and 1998 33

Consolidated Statements of Cash Flows--Years Ended March 31,

2000, 1999 and 1998 34

Notes to Consolidated Financial Statements 35-50

2. Financial Statement Schedules - See Appendix A hereto.

3. Exhibits filed as part of this report are listed in the Exhibit
Index at the end of this report.

(b) Reports on Form 8-K

None.


17



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

DRS TECHNOLOGIES, INC.

Dated: June 28, 2000

/s/ MARK S. NEWMAN
--------------------------------------
Mark S. Newman, Chairman of the Board,
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



SIGNATURE TITLE DATE
--------- ----- ----


/s/ MARK S. NEWMAN Chairman of the Board, President, June 28, 2000
- -------------------------------------- Chief Executive Officer and Director
Mark S. Newman


/s/ RICHARD A. SCHNEIDER Executive Vice President, Chief June 28, 2000
- -------------------------------------- Financial Officer and Treasurer
Richard A. Schneider


/s/ IRA ALBOM Director June 28, 2000
- --------------------------------------
Ira Albom


/s/ DONALD C. FRASER Director June 28, 2000
- --------------------------------------
Donald C. Fraser


/s/ WILLIAM F. HEITMANN Director June 28, 2000
- --------------------------------------
William F. Heitmann


/s/ STEVEN S. HONIGMAN Director June 28, 2000
- --------------------------------------
Steven S. Honigman


/s/ C. SHELTON JAMES Director June 28, 2000
- --------------------------------------
C. Shelton James


/s/ MARK N. KAPLAN Director June 28, 2000
- --------------------------------------
Mark N. Kaplan


/s/ STUART F. PLATT Director June 28, 2000
- --------------------------------------
Stuart F. Platt


/s/ ERIC J. ROSEN Director June 28, 2000
- --------------------------------------
Eric J. Rosen



18


APPENDIX A

DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

INDEX

Independent Auditors' Report

Financial Statement Schedules

Schedule II--Valuation and Qualifying Accounts

All other financial statement schedules have been omitted because they
are either not required, not applicable or the required information is
shown in the consolidated financial statements or the notes thereto.


INDEPENDENT AUDITORS' REPORT ON CONSOLIDATED
FINANCIAL STATEMENT SCHEDULE

The Board of Directors and Stockholders,
DRS Technologies, Inc.:

Under date of May 18, 2000, we reported on the consolidated balance sheets
of DRS Technologies, Inc. and subsidiaries as of March 31, 2000 and 1999, and
the related consolidated statements of earnings, stockholders' equity and
comprehensive earnings, and cash flows for each of the years in the three-year
period ended March 31, 2000, as contained in the 2000 Annual Report to
stockholders. These consolidated financial statements and our report thereon are
incorporated by reference in the Annual Report on Form 10-K for the fiscal year
2000. In connection with our audits of the aforementioned consolidated financial
statements, we also have audited the related consolidated financial statement
schedule as listed in the accompanying index. The consolidated financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on the consolidated financial statement
schedule based on our audits.

In our opinion, such consolidated financial statement schedule, when
considered in relation to the basic consolidated financial statements taken as a
whole, presents fairly, in all material respects, the information set forth
therein.

/s/ KPMG LLP


Short Hills, New Jersey
May 18, 2000


19



DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

SCHEDULE II. VALUATION AND QUALIFYING ACCOUNTS
YEARS ENDED MARCH 31, 2000, 1999 AND 1998

COL. A COL. B COL. C COL. D COL. E
ADDITIONS DEDUCTIONS
--------------------------- ---------------------------

(1) (2) (1) (2)

CHARGED TO CREDITED TO
BALANCE AT CHARGED TO OTHER CREDITED TO OTHER BALANCE AT
BEGINNING OF COSTS AND ACCOUNTS-- COSTS AND ACCOUNTS-- END OF
DESCRIPTION PERIOD EXPENSES DESCRIBE EXPENSES DESCRIBE PERIOD
----------- ------------ ---------- ------------- ------------ ------------ ------------
INVENTORY RESERVE

Year ended March 31, 2000 $3,166,000 $4,885,000 $ 151,000(a) $2,752,000 $ 110,000(b) $ 5,340,000
Year ended March 31, 1999 $1,545,000 $3,424,000 $ 266,000(a) $1,461,000 $ 608,000(b) $ 3,166,000
Year ended March 31, 1998 $ 541,000 $ 514,000 $1,022,000(a) $ 532,000 $ -- $ 1,545,000

LOSSES & FUTURE COSTS
ACCRUED ON UNCOMPLETED
CONTRACTS
Year ended March 31, 2000 $8,119,000 $3,491,000 $ 121,000(a) $4,269,000 $2,489,000(c) $4,973,000
Year ended March 31, 1999 $4,120,000 $2,717,000 $5,784,000(a) $1,197,000 $3,305,000(c) $8,119,000
Year ended March 31, 1998 $2,204,000 $4,834,000 $ 166,000(a) $2,346,000 $ 738,000(c) $4,120,000

ALLOWANCE FOR DOUBTFUL
ACCOUNTS
Year ended March 31, 2000 $1,182,000 $ 389,000 $ 7,000(a) $ 149,000 $ 19,000(b) $1,410,000
Year ended March 31, 1999 $ 486,000 $ 492,000 $ 258,000(a) $ 48,000 $ 6,000(b) $1,182,000
Year ended March 31, 1998 $ 136,000 $ 313,000 $ 71,000(a) $ 34,000 $ -- $ 486,000

- ----------------------

(a) Represents amounts reclassified from related reserve accounts and foreign
currency translation adjustments.

(b) Represents amounts utilized and credited to related asset accounts.

(c) Represents amounts reclassified to related reserve accounts.


20



EXHIBIT INDEX

Certain of the following exhibits, designated with an asterisk (*) are
filed herewith. Certain of the following exhibits, designated with a "P", are
being filed on paper, pursuant to a hardship exemption under Rule 202 of
Regulation S-T. The exhibits not so designated have been previously filed with
the Commission and are incorporated herein by reference to the documents
indicated in brackets following the descriptions of such exhibits.

EXHIBIT NO. DESCRIPTION
- ----------- -----------

3.1 -- Restated Certificate of Incorporation of the Company
[Registration Statement No. 2-70062-NY, Amendment No. 1, Exhibit
2(a)]

3.2 -- Certificate of Amendment of the Restated Certificate of
Incorporation of the Company, as filed July 7, 1983 [Registration
Statement on Form 8-A of the Company, dated July 13, 1983,
Exhibit 2.2]

3.3 -- Composite copy of the Restated Certificate of Incorporation of
the Company, as amended [Registration Statement No. 2-85238,
Exhibit 3.3]

3.4 -- Amended and Restated Certificate of Incorporation of the Company,
as filed April 1, 1996 [Registration Statement No. 33-64641,
Post-Effective Amendment No. 1, Exhibit 3.4]

3.5 -- By-laws of the Company, as amended to November 7, 1994 [Form
10-K, fiscal year ended March 31, 1995, File No. 1-8533, Exhibit
3.4]

3.6 -- Certificate of Amendment of the Certificate of Incorporation of
Precision Echo Acquisition Corp., as filed March 10, 1995 [Form
10-K, fiscal year ended March 31, 1995, File No. 1-8533, Exhibit
3.5]

3.7 -- Form of Advance Notice By-Laws of the Company [Form 10-Q, quarter
ended December 31, 1995, File No. 1-8533, Exhibit 3]

3.8 -- Amended and Restated By-Laws of the Company, as of April 1, 1996
[Registration Statement No. 33-64641, Post-Effective Amendment
No. 1, Exhibit 3.8]

4.1 -- Indenture, dated as of September 22, 1995, between the Company
and The Trust Company of New Jersey, as Trustee, in respect of
the Company's 9% Senior Subordinated Convertible Debentures Due
2003 [Registration Statement No. 33-64641, Amendment No. 1,
Exhibit 4.1]

4.2 -- Form of 9% Senior Subordinated Convertible Debenture Due 2003
(included as part of Exhibit 4.1) [Registration Statement No.
33-64641, Amendment No. 1, Exhibit 4.2]

4.3 -- Registration Rights Agreement, dated as of September 22, 1995
between the Company and Forum Capital Markets L.P. [Registration
Statement No. 33-64641, Amendment No. 1, Exhibit 4.3]

10.1 -- 1991 Stock Option Plan of the Company [Registration Statement No.
33-42886, Exhibit 28.1]

10.2 -- 1996 Omnibus Plan of the Company [Registration Statement No.
333-14487, Exhibit 99.1]

10.3 -- Joint Venture Agreement, dated as of November 3, 1993, by and
between DRS Systems Management Corporation and Laurel
Technologies, Inc. [Form 10-Q, quarter ended December 31, 1993,
File No. 1-8533, Exhibit 6(a)(3)]

10.4 -- Waiver Letter, dated as of December 13, 1993, by and between DRS
Systems Management Corporation and Laurel Technologies, Inc.
[Form 10-Q, quarter ended December 31, 1993, File No. 1-8533,
Exhibit 6(a)(4)]

10.5 -- Partnership Agreement, dated December 13, 1993, by and between
DRS Systems Management Corporation and Laurel Technologies, Inc.
[Form 10-Q, quarter ended December 31, 1993, File No. 1-8533,
Exhibit 6(a)(5)]


21



EXHIBIT NO. DESCRIPTION
- ----------- -----------

10.6 -- Employment, Non-Competition and Termination Agreement, dated July
20, 1994, between Diagnostic/Retrieval Systems, Inc. and David E.
Gross [Form 10-Q, quarter ended June 30, 1994, File No. 1-8533,
Exhibit 1]

10.7 -- Stock Purchase Agreement, dated as of July 20, 1994, between
Diagnostic/Retrieval Systems, Inc. and David E. Gross [Form 10-Q,
quarter ended June 30, 1994, File No. 1-8533, Exhibit 2]

10.8 -- Asset Purchase Agreement, dated October 28, 1994, Acquisition by
PE Acquisition Corp., a subsidiary of Precision Echo, Inc. of all
of the Assets of Ahead Technology Corporation [Form 10-Q, quarter
ended December 31, 1994, File No. 1-8533, Exhibit 1]

10.9 -- Amendment to Agreement for Acquisition of Assets, dated July 5,
1995, between Photronics Corp. and Opto Mechanik, Inc. [Form 8-K,
Amendment No. 1, July 5, 1995, File No. 1-8533, Exhibit 1]

10.10 -- Joint Venture Agreement, dated as of February 6, 1996, by and
among DRS/MS, Inc., Universal Sonics Corporation, Ron Hadani,
Howard Fidel and Thomas S. Soulos [Registration Statement No.
33-64641, Amendment No. 1, Exhibit 10.91]

10.11 -- Partnership Agreement, dated as of February 6, 1996, by and
between DRS/MS, Inc. and Universal Sonics Corporation
[Registration Statement No. 33-64641, Amendment No. 1, Exhibit
10.92]

10.12 -- Asset Purchase Agreement, dated as of February 9, 1996, by and
among Mag-Head Engineering, Company, Inc. and Ahead Technology
Acquisition Corporation, a subsidiary of Precision Echo, Inc.
[Registration Statement No. 33-64641, Post-Effective Amendment
No. 1, Exhibit 10.93]

10.13 -- Employment, Non-Competition and Termination Agreement, dated
March 28, 1996, between the Company and Leonard Newman
[Registration Statement No. 33-64641, Post-Effective Amendment
No. 1, Exhibit 10.94]

10.14 -- Asset Purchase Agreement, dated June 17, 1996, by and among
Vikron, Inc., Northland Aluminum, Inc., Ahead Wisconsin
Acquisition Corporation, a third-tier subsidiary of the Company,
and Ahead Technology, Inc., a second-tier subsidiary of the
Company [Form 10-K, fiscal year ended March 31, 1997, File No. 1-
8533, Exhibit 10.99]

10.15 -- Agreement and Plan of Merger, dated September 30, 1996, by and
among PTI Acquisition Corp., a subsidiary of the Company, Pacific
Technologies, Inc., David A. Leedom, Karen A. Mason, Robert T.
Miller, Carl S. Ito and Barry S. Kindig [Form 10-K, fiscal year
ended March 31, 1997, File No. 1-8533, Exhibit 10.101]

10.16 -- Asset Purchase Agreement, dated October 22, 1996, by and among
Ahead Technology, Inc., a second-tier subsidiary of the Company,
Nortronics Acquisition Corporation, a third-tier subsidiary of
the Company, Nortronics Company, Inc., Alan Kronfeld, Thomas
Philipich and Robert Liston [Form 10-K, fiscal year ended March
31, 1997, File No. 1- 8533, Exhibit 10.102]

10.17 -- Purchase Agreement, dated as of September 19, 1997, between DRS
Technologies, Inc. and Spar Aerospace Limited. [Form 8-K, October
27, 1997, File No. 1-8533, Exhibit 1]

10.18 -- Asset Purchase Agreement, dated July 28, 1998, by and among the
Company, Raytheon TI Systems, Inc., Raytheon Company and Raytheon
Systems Georgia, Inc. [Form 8-K, November 4, 1998, File No.
1-8533, Exhibit 1]

10.19 -- Letter Amendment by and among the Company, Raytheon TI Systems,
Inc., Raytheon Company and Raytheon Systems Georgia, Inc., dated
October 20, 1998, amending the Asset Purchase Agreement. [Form
8-K, November 4, 1998, File No. 1-8533, Exhibit 2]

10.20 -- Amended and Restated Revolving Credit Loan and Term Loan
Agreement, dated October 20, 1998, by and among the Company, DRS
Technologies Canada Company, DRS Technologies Canada, Inc., DRS
EO, Inc., DRS FPA, L.P. and Mellon Bank, N.A. [Form 8-K, November
4, 1998, File No. 1-8533, Exhibit 3]


22



EXHIBIT NO. DESCRIPTION
- ----------- -----------

10.21 -- Agreement and Plan of Merger dated August 26, 1998, as amended,
among DRS Technologies, Inc., DRS Merger Sub, Inc. and NAI
Technologies, Inc. [Registration Statement No. 333-69751, Post
Effective Amendment No. 1, Exhibit 2.1]).

10.22 -- Amendment to Agreement and Plan of Merger, dated February 17,
1999, among DRS Technologies, Inc., DRS Merger Sub, Inc. and NAI
Technologies, Inc. [Form 8-K, March 5, 1999, File No. 1-8533,
Exhibit 2]

10.23 -- 1991 Stock Option Plan of NAI Technologies, Inc. [Registration
Statement No. 333-69751, Post Effective Amendment No. 1 on Form
S-8, Exhibit 4.4]

10.24 -- 1993 Stock Option Plan for Directors of NAI Technologies, Inc.
[Registration Statement No. 333-69751, Post Effective Amendment
No. 1 on Form S-8, Exhibit 4.5]

10.25 -- 1996 Stock Option Plan of NAI Technologies, Inc. [Registration
Statement No. 333-69751, Post Effective Amendment No. 1 on Form
S-8, Exhibit 4.6]

10.26 Employment Agreement, dated as of November 20, 1996, by and
between the Company and Mark S. Newman [Form 10-K, fiscal year
ended March 31, 1999, File No. 1-8533, Exhibit 10.47]

10.27 Employment Agreement, dated as of April 30, 1997, by and between
the Company and Nina Laserson Dunn [Form 10-K, fiscal year ended
March 31, 1999, File No. 1-8533, Exhibit 10.48]

10.28 Employment Agreement, dated as of February 19, 1999, by and
between the Company and Richard A. Schneider [Form 10-K, fiscal
year ended March 31, 1999, File No. 1-8533, Exhibit 10.49]

10.29[P] Subcontract No. 483901(D), dated June 24, 1994, under Contract
No. N00024-94-D-5204, between the Company and Unisys Corporation
Government Systems Group [Form 10-K, fiscal year ended March 31,
1995, 1995, File No. 1-8533, Exhibit 10.37]

10.30[P] Purchase Order No. 10606321 1, dated October 28, 1998, between
the Company and Raytheon TI Systems, Inc.

10.31[P] Contract DAAH01-97-C-0390, dated September 24, 1997, between
Hughes Georgia, Inc. and the U.S. Army

10.32[P] Modification P00001, dated January 16, 1998, to Contract
DAAH01-97-C-0390

10.33[P] Modification P00008, dated October 30, 1998, to Contract
DAAH01-97-C-0390

10.34[P] Contract DAAB07-97-C-J430, dated April 1, 1997, between Hughes
Aircraft Co. and the U.S. Army

10.35[P] Modification P00037, dated March 31, 1999, to Contract
DAAB07-97-C-J430

*10.36 First Amendment and Modification Agreement, dated August 15,
1999, by and among the Company, DRS Technologies Canada Company,
DRS Technologies Canada, Inc., DRS Sensor Systems, Inc., formerly
known as "DRS EO, Inc.", and DRS Infrared Technologies, LP,
formerly known as "DRS FPA, L.P." and Mellon Bank, N.A. as the
Agent and Lender

*10.37 Second Amendment and Modification Agreement, dated February 4,
2000, by and among the Company, DRS Technologies Canada Company,
DRS Technologies Canada, Inc., DRS Sensor Systems, Inc., formerly
known as "DRS EO, Inc.", and DRS Infrared Technologies, LP,
formerly known as "DRS FPA, L.P." and Mellon Bank, N.A. as the
Agent and Lender

*13 -- Portions of the 2000 Annual Report to Stockholders of the Company

*21 -- List of subsidiaries of the Company as of March 31, 2000

*23.1 -- Consent of KPMG LLP

*27 -- Financial Data Schedule


23