EX-99.1 3 a2105267zex-99_1.htm EXHIBIT 99.1
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DRS TECHNOLOGIES, INC.
    Corporate Presentation

March 10, 2003

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Safe Harbor

        This presentation contains forward-looking information, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, that is based on management's beliefs and assumptions, current expectations, estimates and projections. Such information, including information relating to the Company's expectations for future financial performance, is not considered historical facts and is considered forward-looking information under the federal securities laws. This information may contain words such as "believes," "anticipates," "plans," "expects," "intends," "estimates" or similar expressions. This information is not a guarantee of the Company's future performance and is subject to risks, uncertainties and other important factors that could cause our actual performance or achievements to differ materially from those expressed or implied by this forward-looking information 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. Given these uncertainties, you should not rely on forward-looking information. The Company undertakes no obligations to update any forward-looking information, whether as a result of new information, future events or otherwise.

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DRS Technologies:

Who We Are
How We Are Growing

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DRS Technologies:

Who We Are

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DRS Technologies
A Dynamic Mid-Tier
Defense Technology Leader

•    Founded November 1968
•    Traded on New York Stock Exchange (symbol: DRS)
•    FY2003* revenues: $655-665 million
      Current run rate: >$800 million
•    3,700 employees worldwide




* Company guidance		   GRAPHIC

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Geographic Diversity

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Management Team

Corporate Organization

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Management Team

Operations Organization

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8

Areas of Expertise

GRAPHIC   Command & Control
•  Tactical Workstations
•  Rugged Computers &
    Peripherals
•  Display Software
•  Power Distribution &
    Control Systems
•  Ship Propulsion		   GRAPHIC   Surveillance
•  Electro-Optic Systems
•  Thermal Imaging Systems
•  IR Detectors
•  Radar and Sonar Systems
•  UAV Systems

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Communications
•  Shipboard Systems
•  Data Links
•  Secure Voice
•  Signal Intelligence
 
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Avionics
•  Mission Recorders
•  Flight Recorders
•  High-Speed Cameras
•  Weapons Alignment
•  Flight Controls

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Platform Applications

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A Record of Growth

($ millions)

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*
Company guidance; CAGR excludes FY2003 and FY2004

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A Record of Growth

($ millions)

DRS has experienced strong growth in revenue and operating profit over the past five years.

Revenue   Operating Profit
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*
Company guidance; CAGR excludes FY2003 and FY2004

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Backlog

($ millions)

DRS calculates backlog using only funded amounts.

Funded Backlog   Funded Backlog
At December 31, 2002

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Fiscal Year Ended March 31,    

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FY04* Revenue Composition

    New Business

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•    CHS-3
•    FMC
•    TWS
•    DVE
•    ITSS
•    FCS
•    ENVG
 
•    FEP
•    DD(X)
•    LCS
•    Deepwater
•    TISS
•    CVN
•    OFW
•    JSF

Existing portfolio drives FY04 revenues.
New business pipeline is healthy.

*
Estimated

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Revenues by Direct Customer

FY04*

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*
Estimated

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FY04* Revenue by Contract Type

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*
Estimated

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Business Organization

Electronic Systems Group (ESG)   GRAPHIC

Electro-Optical Systems Group (EOSG)
 
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Flight Safety and Communications Group (FSCG)
 
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Electronics Systems Group (ESG)

Leader in:
•    Naval tactical workstations
•    Battlefield digitization systems
•    Radar and sonar systems
•    Naval power distribution and control systems
•    Ship propulsion systems		   GRAPHIC

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ESG Product Applications

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Naval Power   Naval Workstations

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Battlefield Digitization

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Electro-Optical Systems Group (EOSG)

•    Infrared (IR) sighting and targeting
•    Weapons guidance systems
•    Cooled and uncooled IR detectors		   GRAPHIC

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EOSG Product Applications

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Ground Vehicle Sighting System   Mast-Mounted Slight (MMS)   Thermal Imaging Sensor System (TISS)   Virtual Imaging System for Approach and Landing (VISUAL)

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Long Range Advanced Scout Surveillance Systems (LRAS3)   Thermal Weapon Sight (TWS)   Remote Sensors   Directional Infrared Countermeasures (DIRCM)

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Flight Safety and Communications Group (FSCG)

•    Deployable flight recorders
•    Integrated shipboard communications systems
•    High-speed digital imaging systems
•    Weapons alignment systems		   GRAPHIC

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FSCG Product Applications

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Weapons Alignment System   Mission Recorders   Emergency Avionics System

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Deployable Flight Recorder   Airborne Separation Video System   Secure Voice Communication System

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Growth Strategy

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Pursue Strategic Acquisitions & Alliances

 
 
 
 
Expand Existing Customer Base

 
 
Develop & Expand Existing Technologies

Leverage Incumbent Relationships

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Strategic Acquisitions

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History of Successfully Integrating Acquisitions

Proven track record of successfully integrating acquired companies.

($ in millions)

 
   12-Month Performance
Prior to Acquisition
   12-Month Performance
After Acquisition
  

 
 
Revenues
 
Op. Inc.
 
Margin
 
Revenues
 
Op. Inc.
 
Margin
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

SPAR Applied Systems
 
$
33.8
 
$
0.0
 
0.0
%
$
32.7
 
$
4.3
 
13.1
%


Raytheon EO

 

$

41.0

 

$

1.2

 

2.9

 

$

91.4

 

$

13.1

 

14.3

 

NAI Technologies
 
$
47.8
 
$
0.7
 
1.5
 
$
52.0
 
$
5.3
 
10.2
 

General Atronics
 
$
17.1
 
$
0.8
 
4.7
 
$
25.7
 
$
2.3
 
8.9
 

Boeing SES
 
$
108.3
 
$
(4.4)
 
(4.1)
 
$
81.9
 
$
10.0
 
12.2
 

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Proven Ability to Capture Value

Announced forward EBITDA acquisition multiples have ranged from 6x to 9x.

($ in millions)

 
   Acquisition
Date
   Transaction
Value
   Realized
Forward
EBITDA*
   Actual
Transaction
Multiple
SPAR Applied Systems   October 1997   $ 38.3   $ 6.6   5.8x
Raytheon EO   October 1998   $ 48.8   $ 21.2   2.3x
NAI Technologies   February 1999   $ 24.8   $ 7.3   3.4x
General Atronics   June 2000   $ 11.5   $ 3.0   3.8x
Boeing SES   September 2001   $ 61.0   $ 12.7   4.8x
*
EBITDA for the twelve months post-acquisition

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AN/UYQ-70 Advanced Display Systems Program Status

•    Program Overview
•    FY03 Events
•    Outlook
•    Summary		   GRAPHIC

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Q-70 Program Overview

•    The Q-70 is a
    common architecture
    combat command &
    control display
    system
•    Used on numerous
    naval platforms
    (surface, air and
    submarine)
•    Sole-source IDIQ
    contract; teamed
    with Lockheed
    Martin since
    mid 1993
•    DRS provides
    system engineering
    services, software
    development and
    hardware production
•    Ongoing product
    improvement via
    customer funded
    R&D activities		   GRAPHIC

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Typical AEGIS Q-70 Installation

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FY03 Events

    •
    FY03 booking plan impacted by:

    •
    Cancellation of Navy Area Wide TBMD Program (funded part of planned DDG Modernization Program)

    •
    Reduction of DDG-51 SCN budget from 3 to 2 ships

    •
    Delay in the CG-47 Cruiser Conversion program

    •
    Partially compensated by:

    •
    Growth in submarine modernization

    •
    Introduction of new products

    •
    Net effect: FY03 Q-70 bookings will be approximately $80 M

Program Remains Healthy

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Q-70 Outlook Is Positive

    DDG-51 New Construction

    •
    Plan increases from 2 to 3 ships in FY04 & 05

    •
    Includes forward fit SQQ-89 funding

    SSN-774

    •
    Plan increases from 1 to 2 ships in FY07

    Cruiser Conversion (CG-47 AEGIS)

    •
    1st ship in FY04; 2 per year in FY05-07; 3 per year in FY08-09

    Submarine Acoustics

    •
    Funds 688 class upgrades (total of 70 submarines over 5 years)

    DDG Modernization (DDG-51 through -78)

    •
    Expected to increase when Navy decides on new system configuration

    Ship Self Defense System (SSDS)

    •
    Funds Q-70s on carriers and amphibious combatants

    •
    FY04 request reflects 26% increase over FY03

President's Budget/FYDP Provides Ample Opportunities

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Summary

DRS UYQ-70 revenue will continue to be $80-100M per year for next 5 years

•    Core drivers
    •    DDG forward & backfit
    •    Submarines
    •    Cruiser conversion
    •    Naval air
    •    Customer-funded engineering
•    Potential growth drivers
    •    International (Korean Aegis)
    •    Platform expansion (subs, carriers and amphibs)		   GRAPHIC

UYQ-70 experience and legacy has positioned DRS to become Display
and processing system supplier for new combatant platforms

    •
    LCS
    •
    DD(X)
    •
    CVN-21

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DRS Power Systems:

The Gold Oval Business

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DRS Power Systems

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Integrated Hull, Mechanical & Electrical Equipment for the U.S. Navy

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Three Businesses—One Mission

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Integrated Hull, Mechanical & Electrical Equipment for the U.S. Navy

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DRS Power Systems Business Units

DRS Power & Control Technologies
•    Navy nuclear products
•    Ship control systems
•    Propulsion systems
•    Industrial systems		   GRAPHIC

DRS Electric Power Technologies
 
DRS Power Technology
•    Electric drive systems
•    Technology development
•    Propulsion technologies
•    Industrial systems		   •    Electric drive systems
•    Steam turbines
•    Gas turbine systems
•    Pump technology
•    Fuel cells & other industrial systems

DRS Power Systems Has Installed Equipment in Every U.S. Navy Combatant Ship Propulsion Plant Since WW II

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DRS Power Systems Business Major Customers

•    NAVSEA
•    Northrop Grumman Newport News
•    Northrop Grumman Ship Systems
•    General Electric
•    General Dynamics Electric Boat
•    General Dynamics Bath Iron Works
•    Bechtel Plant Machinery
•    Rolls-Royce Naval Marine		   GRAPHIC

The U.S. Navy Shipbuilding Community Depends on DRS Power Systems

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DRS Power Systems' Major Products

DD(X) Electric Drive System EDMs
    •    DRS equipment is the baseline ship design
    •    Gas turbine generator packages
    •    Permanent magnet motor
    •    Motor drive controls & power electronics
  
 Navy Nuclear Instrumentation & Control
    •    Largest supplier of nuclear I&C equipment
 
 Ship Control Systems
    •    Market leading motor controls, network and control stations
  
 Industrial Products
    •    Extreme duty motors & drives
    •    Commercial nuclear plant safety-related distributed
          control systems
    •    Packaged gas turbine generators		   GRAPHIC

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Electric Warship Vision

Increasing Affordability and Military Capability

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•    Electric Drive
•    Reduce Number of Prime Movers
•    Fuel Savings
•    Reduced Maintenance		   •    Reduced Manning
•    Automation
•    Electrify Auxiliary Systems		   •    Advanced Weapons and Sensors
•    Warfighting Capabilities
    •    Enhanced Stealth
    •    Increased Payload Volume
    •    Reduced Logistics Dependency
    •    Power Availability &
          Reapportionment
•    Technology Insertion

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Surface Ship Design Trend

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The Most Important Power on the Ship Is No Longer Propulsion

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Excellent Fit Into The "Gold Oval" Strategy

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GFY2004 President's Budget Request

($ millions)

Ship Construction Schedule—GFY

 
   04
   05
   06
   07
   08
   09
DD(X)       1   1   1   2   3
LCS       1   1   —   3   4
Virginia class   1   1   1   2   2   2
CVN-21           1            

DRS Power Systems Opportunity (Content per Hull)

DD(X)   $ 100 M        
LCS   $ 30-40 M        
Virginia class   $ 100 M        
CVN-21   $ 100 M        


Products: Integrated Propulsion, Electrical &
Control Equipment

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DRS Technologies:

How We Are Growing

44

Defense Budget Is Growing

Recent President's Budget Request


DoD Budget by Major Appropriation Title

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Growth Objectives

    •
    20%+ top line growth

    •
    5-7% organic growth

    •
    Balance from acquisitions

    •
    10%+ operating margin

    •
    Solid free cash flow conversion

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Achieving Growth

Maintaining and extending leadership positions in:

    •
    Electro-optics

    •
    Soldier Systems components

    •
    EO Sensor Systems for UAVs, UGVs, Combat Vehicles

    •
    Battlefield Digitization

    •
    Integrated Propulsion, Electrical and Control Equipment

    •
    Next-generation Naval Combat Workstations and Voice Communications Systems


Significant growth potential through positioning on
transformational initiatives

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Focused on Programs That Drive Growth

Soldier Systems

    •
    OFW, TWS, DVE, ENVG, HTSS, MFLS, LPUIR

EO Sensor Systems

    •
    UAVs, CETS, UGVs, USMC Combat Vehicles

Battlefield Digitization

    •
    FBCB2, CHS-3, Bowman

Integrated Naval power systems & components

    •
    DD(X), CVN-21, LCS, CG(X)

Next-generation Naval Combat Workstations and Voice Communications Systems

    •
    DD(X), CVN-21, LCS, SSGN Conversion, Deepwater


Well positioned on high-priority, military initiatives

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Strong Program Portfolio

Core Programs
  
   Future Programs
Q-70
IBAS
LRAS
CHS-2
FBCB2
BOWMAN
SPS-67
AMP
SHINCOM
F/A-18		     
APACHE
ITAS
JAVELIN
MTS
VISUAL
SADA-II
DIRCM
MMS
LINK 11		 GRAPHIC   HTI DD(X)
LCS
CVN-21
FCS
JSF
CHS-3
OFW
AAAV
SVS
IBR		   COMMANCHE
SAFCS
MFLS
HTSS
    TISS
DEEPWATER
ITSS/FEP
CETS
DVE/TWS
LINK 16/22


Core programs support transition to future growth

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Conclusion

    •
    Favorable macro defense budget environment

    •
    Strong portfolio of programs

    •
    Robust new business pipeline

    •
    Solid program performance

    •
    Disciplined acquisition track record

    •
    Excellent relationships with primes/government

    •
    Consistent overall financial performance


Focused on growing stockholder value

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QuickLinks

DRS Technologies: Who We Are How We Are Growing
DRS Technologies: Who We Are
DRS Power Systems: The Gold Oval Business
Products: Integrated Propulsion, Electrical & Control Equipment
DRS Technologies: How We Are Growing
DoD Budget by Major Appropriation Title
Significant growth potential through positioning on transformational initiatives
Well positioned on high-priority, military initiatives
Core programs support transition to future growth
Focused on growing stockholder value