8-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):  February 25, 2005

DRS Technologies, Inc.(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	1-08533 (CommissionFile Number)	13-2632319 (IRS EmployerIdentification No.)
5 Sylvan Way, Parsippany, New Jersey 07054 (Address of principal executive offices)
(973) 898-1500 (Registrant’s telephone number, including area code)
Not Applicable (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4( c) under the (17 CFR 240.13e-4( c))

Item 2.01 Completion of Acquisition or Disposition of Assets

On December 20, 2004, DRS Technologies, Inc. (DRS) announced that on December 14, 2004, it acquired certain assets, including accounts receivable, inventory and personal property, and certain liabilities of Night Vision Equipment Co., Inc. (NVEC) and Excalibur Electro Optics, Inc (Excalibur or Affiliate), pursuant to an Asset Purchase Agreement dated as of November 5, 2004, between a wholly owned subsidiary of DRS and NVEC and Excalibur. This Current Report on Form 8-K/A is being filed in order to present the combined historical financial statements of NVEC and Excalibur, and pro forma financial information as required by Instruction 5 to Item 2.01 and Item 9.01.

Item 9.01. Financial Statements and Exhibits

a)Financial Statements of Business Acquired

The following financial statements are filed as exhibits hereto:

99.1Audited combined financial statements of Night Vision Equipment Company, Inc. and Affiliate as of and for the year ended December 31, 2003.

99.2 Unaudited combined financial statements of Night Vision Equipment Company, Inc. and Affiliate as of September 30, 2004 and 2003 and for the nine-month periods ended September 30, 2004 and 2003.

b)Pro Forma Financial Information

99.3 Unaudited pro forma condensed combined statements of earnings of DRS Technologies, Inc. and NVEC and Affiliate for the year ended March 31, 2004 and the nine-month periods ended December 31, 2004 and 2003.

c)     Exhibits

See Exhibit Index attached hereto.

2

SIGNATURES

Pursuant to the requirements of the Securities Exchange 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.
	(Registrant)
Date: February 25, 2005	By:
	/s/ RICHARD A, SCHNEIDER
	Richard A. Schneider
	Executive Vice President, Chief Financial
	Officer

3

Exhibit Index

Exhibit No.	Description
23.1	Consent of Independent Auditors’
99.1	Audited combined financial statements of Night Vision Equipment Company, Inc. and Affiliate as of and for the year ended December 31, 2003
99.2	Unaudited combined financial statements of Night Vision Equipment Company, Inc. and Affiliate as of September 30, 2004 and 2003 and for the nine-month periods ended September 30, 2004 and 2003
99.3	Unaudited pro forma condensed combined statements of earnings of DRS Technologies, Inc. and NVEC and Affiliate for the year ended March 31, 2004 and the nine-month periods ended December 31, 2004 and 2003

4

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS’

To the Board of Directors,

DRS Technologies, Inc.

We consent to the use of our report dated February 16, 2005, relating to the combined financial statements of Night Vision Equipment Company, Inc. and Excalibur Electro Optics, Inc. (the “Affiliate”) as of and for the year ended December 31, 2003, which appears in this Current Report on Form 8-K/A of DRS Technologies, Inc.

/s/ Buckno Lisicky & Company

Allentown, Pennsylvania

February 23, 2005

EX-99.1

Exhibit 99.1

Independent Auditors’ Report

To the Board of Directors

Night Vision Equipment Company, Inc.

Emmaus, Pennsylvania

We have audited the accompanying combining balance sheets of Night Vision Equipment Company, Inc. and Affiliate (S Corporations) as of December 31, 2003, and the related combining statements of income, retained earnings, and cash flows for the year then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above present fairly, in all material respects, the financial position of Night Vision Equipment Company, Inc. and Affiliate as of December 31, 2003, and the results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the combining financial statements taken as a whole.  The supplementary information is presented only for purposes of additional analysis and is not a required part of the basic financial statements.  Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

/s/ Buckno Lisicky & Company

Allentown, PA

February 16, 2005

1

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING BALANCE SHEETS

December 31, 2003

ASSETS	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.			Combining Eliminations				Combined
CURRENT ASSETS
Cash	$	2,001,550	$		900,130	$	—			$	2,901,680
Accounts receivable, trade	9,899,522		312,222			—				10,211,744
Accounts receivable, related party	411,102		273,497			(684,599			)	—
Inventory	4,678,084		42,741			—				4,720,825
Prepaid expenses	33,130		—			—				33,130
Total current assets	17,023,388		1,528,590			(684,599			)	17,867,379
PROPERTY AND EQUIPMENT
Leasehold improvements	105,529		—			—				105,529
Furniture and fixtures	74,219		—			—				74,219
Equipment	271,054		—			—				271,054
Vehicle	58,219		—			—				58,219
	509,021		—			—				509,021
Less accumulated depreciation	407,109		—			—				407,109
Property and equipment, net	101,912		—			—				101,912
Total assets	$	17,125,300	$	1,528,590		$		(684,599	)	$	17,969,291

See Notes to Financial Statements.

2

	Night Vision			Excalibur
LIABILITIES AND STOCKHOLDER’S EQUITY	Equipment			Electro		Combining
	Company, Inc.			Optics, Inc.		Eliminations				Combined
CURRENT LIABILITIES
Accounts payable	$		3,809,076	$	127,558	$		—		$	3,936,634
Accounts payable, related party	273,497			411,102		(684,599			)	—
Accrued profit sharing	204,425			—		—				204,425
Accrued wages	46,367			—		—				46,367
Customer deposits	91,113			—		—				91,113
Warranty reserve	25,000			—		—				25,000
Taxes payable	97,800			1,702		—				99,502
Total current liabilities	4,547,278			540,362		(684,599			)	4,403,041
STOCKHOLDER’S EQUITY
Common stock, stated value $1 per share; authorized 10,000 shares; issued and outstanding 5,000 shares	5,000			1,000		—				6,000
Additional paid-in capital	23,000			—		—				23,000
Retained earnings	12,550,022			987,228		—				13,537,250
Total stockholder’s equity	12,578,022			988,228		—				13,566,250
Total liabilities and stockholder’s equity	$	17,125,300		$	1,528,590	$	(684,599		)	$	17,969,291

3

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING STATEMENTS OF INCOME

Year Ended December 31, 2003

	Night Vision		Excalibur
	Equipment		Electro			Combining
	Company, Inc.		Optics, Inc.			Eliminations				Combined
Sales, net	$	53,316,323	$		3,923,860	$	(2,064,807		)	$	55,175,376
Cost of sales:
Beginning inventory	2,998,129		330,540			—				3,328,669
Purchases	32,944,150		2,601,964			(2,064,807			)	33,481,307
	35,942,279		2,932,504			(2,064,807			)	36,809,976
Ending inventory	4,678,084		42,741			—				4,720,825
	31,264,195		2,889,763			(2,064,807			)	32,089,151
Gross profit	22,052,128		1,034,097			—				23,086,225
Operating expenses:
General and administrative	4,369,314		309,817			—				4,679,131
Selling	835,909		47,022			—				882,931
	5,205,223		356,839			—				5,562,062
Operating income	16,846,905		677,258			—				17,524,163
Other income:
Interest income	13,548		—			—				13,548
Net income	$	16,860,453	$	677,258		$		—		$		17,537,711

See Notes to Financial Statements.

4

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING STATEMENTS OF RETAINED EARNINGS

Year Ended December 31, 2003

	Night Vision				Excalibur
	Equipment				Electro			Combining
	Company, Inc.				Optics, Inc.			Eliminations		Combined
Balance, January 1, 2003	$	5,379,011			$	1,632,970		$	—	$	7,011,981
Net income	16,860,453				677,258			—		17,537,711
Distributions	(9,689,442			)	(1,323,000		)	—		(11,012,442		)
Balance, December 31, 2003	$		12,550,022		$	987,228		$	—	$	13,537,250

See Notes to Financial Statements.

5

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING STATEMENTS OF CASH FLOWS

Year Ended December 31, 2003

	Night Vision Equipment Company, Inc.				Excalibur Electro Optics, Inc.			Combining Eliminations			Combined
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	16,860,453			$	677,258		$	—		$	17,537,711
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	88,867				—			—			88,867
(Increase) decrease in assets:
Accounts receivable	(8,316,494			)	(153,486		)	(684,599		)	(9,154,579		)
Inventory	(1,679,955			)	142,103			—			(1,537,852		)
Prepaid expenses	(11,998			)	—			—			(11,998		)
Increase (decrease) in liabilities:
Accounts payable	1,617,278				465,866			684,599			2,767,743
Accrued expenses	31,360				(3,786		)	—			27,574
Customer deposits	54,046				—			—			54,046
Warranty reserve	5,440				—			—			5,440
Taxes payable	47,832				—			—			47,832
Net cash provided by operating activities	8,696,829				1,127,955			—			9,824,784
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(125,412			)	—			—			(125,412		)
Net cash used in investing activities	(125,412			)	—			—			(125,412		)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions	(9,689,442			)	(1,323,000		)	—			(11,012,442		)
Net cash used in financing activities	(9,689,442			)	(1,323,000		)	—			(11,012,442		)
Net decrease in cash	(1,118,025			)	(195,045		)	—			(1,313,070		)
Cash:
Beginning	3,119,575				1,095,175			—			4,214,750
Ending	$		2,001,550		$	900,130		$	—		$	2,901,680

See Notes to Financial Statements.

6

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING STATEMENTS OF CASH FLOWS

Year Ended December 31, 2003

	Night Vision		Excalibur
	Equipment		Electro		Combining
	Company, Inc.		Optics, Inc.		Eliminations		Combined
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION
Cash payments for:
Interest	$	3,262	$	—	$	—	$	3,262

See Notes to Financial Statements.

7

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

NOTES TO FINANCIAL STATEMENTS

Note 1.               Summary of Significant Accounting Policies

Nature of operations:

The Company was incorporated December 17, 1986 in the state of Pennsylvania. The Company is engaged in the assembly and sale of night vision equipment, combat I.D. systems, and I.R. laser aiming and illuminating systems and has locations in both Arizona and Pennsylvania. The Company has a GSA Contract with the United States Department of Defense for law enforcement and security equipment, which runs for the period August 1, 2001 through July 31, 2006.  The Company also has a DSCC contract with the United States Department of Defense, which runs for the period September, 2003 to September, 2004.  The DSCC contract contains a 4 year renewal option.

Principles of combination:

The combined financial statements combine the accounts of Night Vision Equipment Company, Inc. and Excalibur Electro Optics, Inc., which are related by virtue of common ownership.  All intercompany balances and transactions have been eliminated in the combined financial statements.

Accounting method:

The Company utilizes the accrual method of accounting for both financial statement and income tax reporting purposes.

Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue recognition:

The Company performs all services prior to recognizing revenue.  Service is deemed complete when shipment has been delivered to its final destination.

Inventory:

Inventories are valued at lower of cost or market using the specific identification method for high dollar items, and the FIFO (first-in, first-out) method for all other items.

Property and equipment:

Property and equipment are stated at cost and depreciated using accelerated methods over the estimated useful lives of the related assets, which range from five to thirty-nine years.

8

Expenditures for maintenance and repairs are charged against operations.  Renewals and betterments that materially extend the life of the assets are capitalized.

Bad debt expense:

Accounts are charged to bad debt expense as they are deemed uncollectible based upon a periodic review of the accounts.  As of December 31, 2003 no allowance for uncollectible accounts was considered necessary.  Bad debt expense for the year ended December 31, 2003 was $1,684.

Shipping and handling costs:

It is the policy of the Company to classify shipping and handling costs as part of general and administrative expenses in the statement of income.

Warranties:

The Company warrants its products against defects for one year from date of purchase.  The Company provides an allowance that is based upon historical information and existing economic conditions.  The reserve for warranty claims as of December 31, 2003 was $25,000.  Warranty expense for the year ended December 31, 2003 was $28,160.

Advertising:

The Company expenses the costs of advertising at the time the advertising takes place.  Advertising expense for the year ended December 31, 2003 is $59,142.

Research and development:

Research and development expenditures are charged to operations as incurred. Research and development costs for the year ended December 31, 2003 were $20,740.

Income taxes:

The Company has elected to be treated as an S corporation under subchapter “S” of the Internal Revenue Code. Consequently, the Company is not liable for federal and state income taxes, except to the extent that the Company operates in state jurisdictions that do not recognize S corporation status. The stockholder reports the Company’s income, losses and tax credit on his individual income tax returns.

Note 2.               Related Party Transactions

The Company is paying rent for office and warehouse facilities in Arizona and Pennsylvania to the wife of it’s sole stockholder.  The agreements for all locations are on a month-to-month basis.  Rent expense amounts to $108,000 for Night Vision Equipment Company, Inc. and $12,000 for Excalibur Electro Optics, Inc. for the year ended December 31, 2003.

9

Note 3.Defined Contribution Plans:

The Company maintains a defined contribution retirement plan.  All employees who have completed six months service and attained age 21 are eligible to participate.  Company contributions are at the sole discretion of the stockholder.  The Company’s contributions for the year ended December 31, 2003 were $204,425.  It is the policy of the Company to fund profit sharing costs accrued.

Note 4.Leases:

The Company leased vehicles under operating lease agreements with terms which expired in 2003.  Lease costs for the year ended December 31, 2003 were $20,071.

Note 5.Commitment:

During 1998, the Company entered into an incentive agreement with an employee which provides for certain rights to future earnings.  The agreement calls for payments to be made in five equal annual installments beginning in 2002.  The payments are classified as Consulting expense on the income statement and amounted to $81,546 for the year ended December 31, 2003.  Future minimum payments related to the incentive agreement as of December 31, 2003 are as follows:

Year ending
December 31,
2004	$	81,546
2005	81,546
2006	81,546
	$	244,638

Note 6. Major Customer

Total sales in fiscal year ended 2003 included 84% to various branches of the United States Department of Defense excluding sales to private contractors who in turn sell to the United States Government.  Sales to the United States Department of Defense in 2003 accounted for 84% of total sales, respectively.

The Company’s success is largely dependent on its ability to maintain working relationships with agents at the military bases and good quality control.  The Company must continue to meet the requirements of the government agencies overseeing the procurement of the Company’s services.  Any failure to meet or maintain the requirements in the government procurement policy could adversely affect its results of operations.  The Company’s risk is minimized by the large volume of contracts individually maintained with each base.

10

Note 7.Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of trade accounts receivable and cash balances in excess of federally insured amounts.

Accounts receivable:

Concentrations of credit risk with respect to accounts receivable are limited because the Company’s major customer is the United States Government or its agencies.  Funds are electronically transferred to the Company, and are normally received within 30 to 60 days of delivery.

Cash:

The Company’s cash accounts are maintained in commercial banks located in Pennsylvania and Arizona.  The total amount by which cash on deposit in these banks exceeds the federally insured limits is approximately $4,160,000 as of December 31, 2003.  The Company has not experienced any losses as a result of these noninsured cash balances.

Note 8.Subsequent Event

On December 14, 2004, DRS Technologies, Inc. (a public company) acquired certain assets and liabilities of Night Vision Equipment Company, Inc. and its Affiliate.  The purchase price was $42.5 million in cash, with additional consideration payable upon achievement of certain revenue targets.

11

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING SCHEDULE OF

GENERAL AND ADMINISTRATIVE AND SELLING EXPENSES

Year Ended December 31, 2003

	Night Vision		Excalibur
	Equipment		Electro		Combining
	Company, Inc.		Optics, Inc.		Eliminations		Combined
General and administrative:
Bad debts	$	1,684	$	—	$	—	$	1,684
Bank and bond fees	11,131		12,014		—		23,145
Computer	64,934		—		—		64,934
Consulting	296,296		—		—		296,296
Contributions	74,208		6,313		—		80,521
Credit card fees	55,227		—		—		55,227
Custom fees	4,329		—		—		4,329
Data processing	2,838		13,224		—		16,062
Depreciation	88,867		—		—		88,867
Dues and subscriptions	6,261		—		—		6,261
Employee benefits	135,978		—		—		135,978
Freight	164,151		17,005		—		181,156
Import duty	74,206		—		—		74,206
Insurance	38,376		11,501		—		49,877
Interest	3,262		—		—		3,262
Miscellaneous	5,695		326		—		6,021
Moving	5,000		—		—		5,000
Office expense	41,520		7,211		—		48,731
Postage	8,539		—		—		8,539
Production	89,161		—		—		89,161
Professional fees	29,535		1,475		—		31,010
Profit sharing	204,425		—		—		204,425
Profit sharing, administration	4,763		—		—		4,763
Rent	108,000		12,000		—		120,000
Repairs and maintenance	27,389		5,958		—		33,347
Salaries and wages	1,764,730		—		—		1,764,730
Salary, officer	404,808		50,000		—		454,808
Security	1,559		—		—		1,559

12

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING SCHEDULE OF

GENERAL AND ADMINISTRATIVE AND SELLING EXPENSES

Year Ended December 31, 2003

	Night Vision		Excalibur
	Equipment		Electro			Combining
	Company, Inc.		Optics, Inc.			Eliminations			Combined
General and administrative (continued):
Shipping	16,059		—			—			16,059
Supplies, other	9,740		—			—			9,740
Supplies, shop	8,528		—			—			8,528
Taxes, other	175,000		33,223			—			208,223
Taxes, payroll	164,452		—			—			164,452
Telephone	18,394		4,462			—			22,856
Temporary personnel	152,855		132,424			—			285,279
Tooling costs	30,209		—			—			30,209
Utilities	28,974		2,681			—			31,655
Vehicle	20,071		—			—			20,071
Warranty	28,160		—			—			28,160
	$	4,369,314	$		309,817	$	—		$			4,679,131
Selling:
Advertising	$	—	$	28,664		$		—	$		28,664
Catalog	26,074		4,404			—			30,478
Research and development	20,740		—			—			20,740
Salaries, sales	483,686		—			—			483,686
Show and travel	305,409		13,954			—			319,363
	$	835,909	$	47,022		$		—	$	882,931

13

EX-99.2

Exhibit 99.2

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINED BALANCE SHEETS

September 30, 2004 and 2003

(Unaudited)

	2004		2003
ASSETS
CURRENT ASSETS
Cash	$	2,592,227	$	3,810,596
Accounts receivable, trade	9,969,158		5,696,982
Inventory	7,444,567		3,368,438
Prepaid expenses	47,892		53,990
Total current assets	20,053,844		12,930,006
PROPERTY AND EQUIPMENT
Leasehold improvements	105,529		105,529
Furniture and fixtures	74,219		74,219
Equipment	285,054		271,054
Vehicle	58,219		—
	523,021		450,802
Less accumulated depreciation	421,931		341,227
Property and equipment, net	101,090		109,575
Total assets	$	20,154,934	$	13,039,581

See Notes to Unaudited Financial Statements.

1

	2004		2003
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES
Accounts payable	$	4,208,521	$	3,864,775
Accrued interest	2,447		2,447
Accrued profit sharing	179,115		120,630
Accrued wages	249,753		113,605
Customer deposits	70,285		—
Warranty reserve	25,000		25,000
Taxes payable	408,000		64,743
Total current liabilities	5,143,121		4,191,200
STOCKHOLDER’S EQUITY
Common stock, stated value $1 per share; authorized 10,000 shares; issued and outstanding 6,000 shares	6,000		6,000
Additional paid-in capital	23,000		23,000
Retained earnings	14,982,813		8,819,381
Total stockholder’s equity	15,011,813		8,848,381
Total liabilities and stockholder’s equity	$	20,154,934	$	13,039,581

2

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINED STATEMENTS OF INCOME

Nine Months Ended September 30, 2004 and 2003

(Unaudited)

	2004		2003
Sales, net	$	71,635,737	$	35,696,466
Cost of sales:
Beginning inventory	4,720,825		3,430,362
Purchases	46,697,160		19,800,690
	51,417,985		23,231,052
Ending inventory	7,444,567		3,368,438
	43,973,418		19,862,614
Gross profit	27,662,319		15,833,852
Operating expenses:
General and administrative	4,181,171		2,944,021
Selling	879,870		512,569
	5,061,041		3,456,590
Operating income	22,601,278		12,377,262
Other income:
Interest income	11,357		10,333
Net income	$	22,612,635	$	12,387,595

See Notes to Unaudited Financial Statements.

3

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINED STATEMENTS OF STOCKHOLDER’S EQUITY

Nine Months Ended September 30, 2004 and 2003

(Unaudited)

	Common		Paid-in		Retained
	Stock		Capital		Earnings
Balance, January 1, 2003	$	1,000	$	23,000	$	7,011,981
Net income:
Night Vision Equipment Company, Inc.	—		—		11,862,581
Excalibur Electro Optics, Inc	—		—		525,014
Distributions:
Night Vision Equipment Company, Inc.	—		—		(9,257,195		)
Excalibur Electro Optics, Inc	—		—		(1,323,000		)
Balance, September 30, 2003	$	1,000	$	23,000	$	8,819,381
Balance, January 1, 2004	$	1,000	$	23,000	$	13,537,250
Net income
Night Vision Equipment Company, Inc.	—		—		22,115,755
Excalibur Electro Optics, Inc	—		—		496,880
Distributions
Night Vision Equipment Company, Inc.	—		—		(20,167,072		)
Excalibur Electro Optics, Inc	—		—		(1,000,000		)
Balance, September 30, 2004	$	1,000	$	23,000	$	14,982,813

See Notes to Unaudited Financial Statements.

4

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30, 2004 and 2003

(Unaudited)

	2004			2003
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	22,612,635		$	12,387,595
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	14,822			22,985
(Increase) decrease in assets:
Accounts receivable	906,649			(3,270,844		)
Inventory	(2,723,742		)	(39,769		)
Prepaid expenses	(14,763		)	(32,858		)
Increase (decrease) in liabilities:
Accounts payable	(392,176		)	1,181,214
Accrued expenses	180,523			17,251
Customer deposits	(20,827		)	(37,067		)
Warranty reserve	—			94
Taxes payable	308,498			14,632
Net cash provided by operating activities	20,871,619			10,243,233
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	(14,000		)	(67,193		)
Net cash used in investing activities	(14,000		)	(67,193		)
CASH FLOWS FROM FINANCING ACTIVITIES
Distributions	(21,167,072		)	(10,580,195		)
Net cash used in financing activities	(21,167,072		)	(10,580,195		)
Net decrease in cash	(309,453		)	(404,155		)
Cash:
Beginning	2,901,680			4,214,751
Ending	$	2,592,227		$	3,810,596

See Notes to Unaudited Financial Statements.

5

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

Note 1. Summary of Significant Accounting Policies

Nature of operations:

The Company was incorporated December 17, 1986 in the state of Pennsylvania. The Company is engaged in the assembly and sale of night vision equipment, combat I.D. systems, and I.R. laser aiming and illuminating systems and has locations in both Arizona and Pennsylvania. The Company has a GSA Contract with the United States Department of Defense for law enforcement and security equipment, which runs for the period August 1, 2001 through July 31, 2006.  The Company also has a DSCC contract with the United States Department of Defense, which runs for the period September, 2003 to September, 2004 and contains a 4 year renewal option.  The contract was renewed for the period October, 2004 to September, 2005.

Principles of combination:

The combined financial statements combine the accounts of Night Vision Equipment Company, Inc. and Excalibur Electro Optics, Inc., which are related by virtue of common ownership.  All intercompany balances and transactions have been eliminated in the combined financial statements.

Accounting method:

The Company utilizes the accrual method of accounting for both financial statement and income tax reporting purposes.

Use of estimates:

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue recognition:

The Company performs all services prior to recognizing revenue.  Service is deemed complete when shipment has been delivered to its final destination.

Inventory:

Inventories are valued at lower of cost or market using the specific identification method for high dollar items, and the FIFO (first-in, first-out) method for all other items.

Property and equipment:

Property and equipment are stated at cost and depreciated using accelerated methods over the estimated useful lives of the related assets, which range from five to thirty-nine years.

6

Expenditures for maintenance and repairs are charged against operations.  Renewals and betterments that materially extend the life of the assets are capitalized.

Bad debt expense:

Accounts are charged to bad debt expense as they are deemed uncollectible based upon a periodic review of the accounts.  As of September 30, 2004 and 2003, no allowance for uncollectible accounts was considered necessary.  Bad debt expense for the nine months ended September 30, 2004 and 2003 was $11,611 and $1,684, respectively.

Shipping and handling costs:

It is the policy of the Company to classify shipping and handling costs as part of general and administrative expenses in the statement of income.

Warranties:

The Company warrants its products against defects for one year from date of purchase.  The Company provides an allowance that is based upon historical information and existing economic conditions.  The reserve for warranty claims as of September 30, 2004 and 2003 was $25,000 for both years.  Warranty expense for the nine months ended September 30, 2004 and 2003 was $4,853 and $7,723, respectively.

Advertising:

The Company expenses the costs of advertising at the time the advertising takes place.  Advertising expense for the nine months ended September 30, 2004 and 2003 is $24,462 and $29,160, respectively.

Research and development:

Research and development expenditures are charged to operations as incurred. Research and development costs for the nine months ended September 30, 2004 and 2003 were $29 and $16,850 respectively.

Income taxes:

The Company has elected to be treated as an S corporation under subchapter “S” of the Internal Revenue Code. Consequently, the Company is not liable for federal and state income taxes, except to the extent that the Company operates in state jurisdictions that do not recognize S corporation status. The stockholder reports the Company’s income, losses and tax credit on his individual income tax returns.

7

Note 2.Related Party Transactions

The Company is paying rent for office and warehouse facilities in Arizona and Pennsylvania to the wife of it’s sole stockholder.  The agreements for all locations are on a month-to-month basis.  Rent expense amounts to $125,000 and $90,000 for the nine months ended September 31, 2004 and 2003, respectively.

Note 3.Defined Contribution Plans

The Company maintains a defined contribution retirement plan.  All employees who have completed six months service and attained age 21 are eligible to participate.  Company contributions are at the sole discretion of the stockholder.  The Company’s contributions for the nine months ended September 30, 2004 and 2003 were $174,817 and $120,630, respectively.  It is the policy of the Company to fund profit sharing costs accrued.

Note 4.Leases

The Company lease vehicles under operating lease agreements with terms which expired in 2003.  Lease costs for the nine months ended September 30, 2004 and 2003 were $0 and $10,597, respectively.

Note 5.Commitment

During 1998, the Company entered into an incentive agreement with an employee which provides for certain rights to future earnings.  The agreement calls for payments to be made in five equal annual installments beginning in 2002.  The payments are classified as consulting expense on the income statement and amounted to $0 and $61,160 for the nine months ended September 30, 2004 and 2003, respectively.  Future minimum payments related to the incentive agreement as of September 30, 2004 are as follows:

Year ending September 30,
2005	$	81,546
2006	81,546
2007	20,386
	$	183,478

Note 6.Major Customer

Total sales in the nine months ended 2004 included 88% to various branches of the United States Department of Defense excluding sales to private contractors who in turn

8

sell to the United States Government.  Sales to the United States Department of Defense in 2004 and 2003 accounted for 88% and 84% of total sales, respectively.

The Company’s success is largely dependent on its ability to maintain working relationships with agents at the military bases and good quality control.  The Company must continue to meet the requirements of the government agencies overseeing the procurement of the Company’s services.  Any failure to meet or maintain the requirements in the government procurement policy could adversely affect its results of operations.  The Company’s risk is minimized by the large volume of contracts individually maintained with each base.

Note 7.Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of trade accounts receivable and cash balances in excess of federally insured amounts.

Accounts receivable:

Concentrations of credit risk with respect to accounts receivable are limited because the Company’s major customer is the United States Government or its agencies.  Funds are electronically transferred to the Company, and are normally received within 30 to 60 days of delivery.

Cash:

The Company’s cash accounts are maintained in commercial banks located in Pennsylvania and Arizona.  The Company has not experienced any losses as a result of these noninsured cash balances.

Note 8.Subsequent Event

On December 14, 2004, DRS Technologies, Inc. (a public company) acquired certain assets and liabilities of Night Vision Equipment Company, Inc. and its Affiliate.  The purchase price was $42.5 million in cash, with additional consideration payable upon achievement of certain revenue targets.

9

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING BALANCE SHEETS

September 30, 2004

(Unaudited)

	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.		Combining Eliminations			Combined
ASSETS
CURRENT ASSETS
Cash	$	2,316,232	$	275,995	$	—		$	2,592,227
Accounts receivable, trade	9,191,105		778,053		—			9,969,158
Accounts receivable, related party	—		10,268		(10,268		)	—
Inventory	7,322,468		122,099		—			7,444,567
Prepaid expenses	24,463		23,429		—			47,892
Total current assets	18,854,268		1,209,844		(10,268		)	20,053,844
PROPERTY AND EQUIPMENT
Leasehold improvements	105,529		—		—			105,529
Furniture and fixtures	74,219		—		—			74,219
Equipment	285,054		—		—			285,054
Vehicle	58,219		—		—			58,219
	523,021		—		—			523,021
Less accumulated depreciation	421,931		—		—			421,931
Property and equipment, net	101,090		—		—			101,090
Total assets	$	18,955,358	$	1,209,844	$	(10,268	)	$	20,154,934

10

	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.		Combining Eliminations			Combined
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES
Accounts payable	$	3,483,785	$	724,736	$	—		$	4,208,521
Accounts payable, related party	10,268		—		(10,268		)	—
Accrued interest	2,447		—		—			2,447
Accrued profit sharing	179,115		—		—			179,115
Accrued wages	249,753		—		—			249,753
Customer deposits	70,285		—		—			70,285
Warranty reserve	25,000		—		—			25,000
Taxes payable	408,000		—		—			408,000
Total current liabilities	4,428,653		724,736		(10,268		)	5,143,121
STOCKHOLDER’S EQUITY
Common stock, stated value $1 per share; authorized 10,000 shares; issued and outstanding 6,000 shares	5,000		1,000		—			6,000
Additional paid-in capital	23,000		—		—			23,000
Retained earnings	14,498,705		484,108		—			14,982,813
Total stockholder’s equity	14,526,705		485,108		—			15,011,813
Total liabilities and stockholder’s equity	$	18,955,358	$	1,209,844	$	(10,268	)	$	20,154,934

11

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING BALANCE SHEETS

September 30, 2003

(Unaudited)

	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.		Combining Eliminations			Combined
ASSETS
CURRENT ASSETS
Cash	$	3,435,844	$	374,752	$	—		$	3,810,596
Accounts receivable, trade	5,225,982		471,000		—			5,696,982
Accounts receivable, related party	225		—		(225		)	—
Inventory	3,062,177		306,261		—			3,368,438
Prepaid expenses	21,130		32,860		—			53,990
Total current assets	11,745,358		1,184,873		(225		)	12,930,006
PROPERTY AND EQUIPMENT
Leasehold improvements	105,529		—		—			105,529
Furniture and fixtures	74,219		—		—			74,219
Equipment	271,054		—		—			271,054
Vehicle	—		—		—			—
	450,802		—		—			450,802
Less accumulated depreciation	341,227		—		—			341,227
Property and equipment, net	109,575		—		—			109,575
Total assets	$	11,854,933	$	1,184,873	$	(225	)	$	13,039,581

12

	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.		Combining Eliminations			Combined
LIABILITIES AND STOCKHOLDER’S EQUITY
CURRENT LIABILITIES
Accounts payable	$	3,516,254	$	348,521	$	—		$	3,864,775
Accounts payable, related party	—		225		(225		)	—
Accrued interest	2,447		—		—			2,447
Accrued profit sharing	120,630		—		—			120,630
Accrued wages	113,605		—		—			113,605
Customer deposits	—		—		—			—
Warranty reserve	25,000		—		—			25,000
Taxes payable	64,600		143		—			64,743
Total current liabilities	3,842,536		348,889		(225		)	4,191,200
STOCKHOLDER’S EQUITY
Common stock, stated value $1 per share; authorized 10,000 shares; issued and outstanding 6,000 shares	5,000		1,000		—			6,000
Additional paid-in capital	23,000		—		—			23,000
Retained earnings	7,984,397		834,984		—			8,819,381
Total stockholder’s equity	8,012,397		835,984		—			8,848,381
Total liabilities and stockholder’s equity	$	11,854,933	$	1,184,873	$	(225	)	$	13,039,581

13

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING STATEMENTS OF INCOME

Nine Months Ended September 30, 2004

(Unaudited)

	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.		Combining Eliminations			Combined
Sales, net	$	70,544,107	$	3,374,331	$	(2,282,701	)	$	71,635,737
Cost of sales:
Beginning inventory	4,678,084		42,741		—			4,720,825
Purchases	46,241,910		2,737,951		(2,282,701		)	46,697,160
	50,919,994		2,780,692		(2,282,701		)	51,417,985
Ending inventory	7,322,468		122,099		—			7,444,567
	43,597,526		2,658,593		(2,282,701		)	43,973,418
Gross profit	26,946,581		715,738		—			27,662,319
Operating expenses:
General and administrative	3,972,034		209,137		—			4,181,171
Selling	870,149		9,721		—			879,870
	4,842,183		218,858		—			5,061,041
Operating income	22,104,398		496,880		—			22,601,278
Other income:
Interest income	11,357		—		—			11,357
Net income	$	22,115,755	$	496,880	$	—		$	22,612,635

14

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING STATEMENTS OF INCOME

Nine Months Ended September 30, 2003

(Unaudited)

	Night Vision Equipment Company, Inc.		Excalibur Electro Optics, Inc.		Combining Eliminations			Combined
Sales, net	$	34,365,605	$	2,563,558	$	(1,232,697	)	$	35,696,466
Cost of sales:
Beginning inventory	2,998,129		432,233		—			3,430,362
Purchases	19,348,008		1,685,379		(1,232,697		)	19,800,690
	22,346,137		2,117,612		(1,232,697		)	23,231,052
Ending inventory	3,062,177		306,261		—			3,368,438
	19,283,960		1,811,351		(1,232,697		)	19,862,614
Gross profit	15,081,645		752,207		—			15,833,852
Operating expenses:
General and administrative	2,756,617		187,404		—			2,944,021
Selling	472,780		39,789		—			512,569
	3,229,397		227,193		—			3,456,590
Operating income	11,852,248		525,014		—			12,377,262
Other income:
Interest income	10,333		—		—			10,333
Net income	$	11,862,581	$	525,014	$	—		$	12,387,595

15

NIGHT VISION EQUIPMENT COMPANY, INC. AND AFFILIATE

COMBINING SCHEDULE OF

GENERAL AND ADMINISTRATIVE AND SELLING EXPENSES

Nine Months Ended September 30, 2004

(with comparative totals for 2003)

(Unaudited)

	Night Vision Equipment		Excalibur Electro		Combining		Combined
	Company, Inc.		Optics, Inc.		Eliminations		2004		2003
General and administrative:
Bad debts	$	—	$	11,611	$	—	$	11,611	$	1,684
Bank and bond fees	2,180		63		—		2,243		14,333
Computer	39,728		3,588		—		43,316		60,213
Consulting	161,915		—		—		161,915		227,637
Contributions	225,375		—		—		225,375		59,956
Credit card fees	26,052		6,122		—		32,174		35,690
Data processing	2,472		581		—		3,053		2,432
Depreciation	14,822		—		—		14,822		22,985
Dues and subscriptions	9,979		20		—		9,999		5,420
Employee benefits	167,304		—		—		167,304		89,627
Freight	282,089		7,746		—		289,835		131,286
Import duty	11,013		—		—		11,013		57,627
Insurance	155,762		9,399		—		165,161		54,943
Interest	2,447		—		—		2,447		2,447
Miscellaneous	2,459		—		—		2,459		2,817
Moving	86		—		—		86		5,000
Office expense	26,460		1,677		—		28,137		33,518
Postage	7,456		925		—		8,381		5,957
Production	93,373		—		—		93,373		55,069
Professional fees	68,589		1,560		—		70,149		29,181
Profit sharing	174,817		—		—		174,817		120,630
Profit sharing, admin.	5,860		—		—		5,860		5,460
Rent	116,000		9,000		—		125,000		90,000
Repairs and maintenance	28,140		1,813		—		29,953		18,716
Salaries and wages	1,455,045		—		—		1,455,045		1,174,167
Salary, officer	187,500		—		—		187,500		191,346
Security	1,710		18		—		1,728		680
Shipping	25,059		2,445		—		27,504		9,093
Supplies, other	16,414		—		—		16,414		4,099
Supplies, shop	10,770		—		—		10,770		4,874
Taxes, other	439,212		—		—		439,212		131,554
Taxes, payroll	149,139		—		—		149,139		97,594
Telephone	10,977		3,214		—		14,191		18,010
Temporary personnel	—		147,095		—		147,095		113,947
Tooling costs	7,529		—		—		7,529		17,594
Utilities	29,076		2,021		—		31,097		24,236
Vehicle	10,611		—		—		10,611		16,476
Warranty	4,614		239		—		4,853		7,723
	$	3,972,034	$	209,137	$	—	$	4,181,171	$	2,944,021
Selling:
Advertising	$	—	$	8,885	$	—	$	8,885	$	21,431
Catalog	15,577		—		—		15,577		7,729
Research & development	29		—		—		29		16,850
Salaries, sales	688,352		—		—		688,352		242,969
Show and travel	166,191		836		—		167,027		223,590
	$	870,149	$	9,721	$	—	$	879,870	$	512,569

16

EX-99.3

Exhibit 99.3

Unaudited Pro Forma Condensed Combined Financial Statement Information

The unaudited pro forma condensed combined financial statement information (unaudited pro forma information) set forth below is presented to reflect the pro forma effects of DRS Technologies, Inc.’s (DRS or the Company) December 14, 2004 acquisition of certain assets and liabilities of Night Vision Equipment Co., Inc. (NVEC) and Excalibur Electro Optics, Inc. (Excalibur), privately-held businesses headquartered in Allentown, Pennsylvania. NVEC and Excalibur are related businesses, as they are under common control and have common management  (hereinafter referred to as NVEC and Affiliate, respectively). The purchase price was $42.5 million in cash (subject to a working capital adjustment), with additional consideration of up to a maximum of $37.5 million payable upon achieving certain annual revenue targets (for a period of three years). In addition to purchase price, the Company recorded approximately $0.3 million for acquisition related costs. The acquisition has been accounted for under the purchase method of accounting in accordance with accounting principles generally accepted in the United States of America. Accordingly, NVEC’s operating results were included in DRS’s operating results beginning December 15, 2004.

The unaudited pro forma information shows the results of continuing operations of DRS for the year ended March 31, 2004 and for the nine-month periods ended December 31, 2004 and 2003, as though the acquisition of NVEC and Affiliate had occurred on April 1, 2003.  A pro forma combined balance sheet is not presented as the acquisition of NVEC and Affiliate have been reported in the unaudited consolidated balance sheet of DRS as of December 31, 2004 as filed on Form 10-Q.

The unaudited pro forma adjustments related to the acquisition are based on preliminary purchase price allocations. Actual adjustments will be based on analyses of fair values of assets acquired and liabilities assumed, including identifiable tangible and intangible assets and deferred tax assets and liabilities as well as estimates of the useful lives of tangible and amortizable intangible assets, which will be completed after DRS obtains third–party appraisals, performs its own internal assessments and reviews all available data. The unaudited pro forma information does not reflect an estimate of amortization for acquired intangible assets, as the valuation of the acquired intangible assets is currently in process. Differences between the preliminary and final purchase price allocations could have a significant impact on the accompanying unaudited pro forma information. The Company expects to complete its purchase price allocation in the first quarter of fiscal 2006.

As more fully described in DRS’s December 31, 2004, report on Form 10-Q, during the three months ended December 31, 2004, Company management agreed to a plan to sell two of its operating units, DRS Weather Systems, Inc. (DRS Weather) and DRS Broadcast Technology (DRS Broadcast). As a result of the planned divestiture, the discontinued operations of DRS Weather and DRS Broadcast are excluded from the unaudited pro forma condensed combined statements of earnings for all periods presented.

The unaudited pro forma condensed combined financial statement information is based on, and should be read together with (i) DRS’s historical consolidated financial statements as of and for the year ended March 31, 2004, and DRS’s unaudited consolidated financial statements as of December 31, 2004 and for the three-and nine-month periods ended December 31, 2004 and 2003 and (ii) NVEC and Affiliate’s historical combined financial statements as of and for the year ended December 31, 2003 and as of and for the nine-month periods ended September 30, 2004 and 2003, included elsewhere in this Current Report on Form 8-K/A.  The unaudited pro forma condensed combined financial statement information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved had the acquisition been completed as of April 1, 2003, or of the results of operations that may be attained by DRS in the future.

DRS TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED

COMBINED STATEMENT OF EARNINGS

Year Ended March 31, 2004

(in thousands, except per share data)

	Historical
	DRS (1)		NVEC and Affiliate (2)		Pro Forma Adjustments			Pro Forma DRS
Revenues	$	986,931	$	55,175	$	—		$	1,042,106
Costs and expenses	883,599		37,651		—		(5)	921,250
Operating income	103,332		17,524		—			120,856
Interest income	754		14		—			768
Interest and related expenses	24,259		—		—			24,259
Other expense	545		—		—			545
Earnings from continuing operations before minority interest and income taxes	79,282		17,538		—			96,820
Minority interest	1,951		—		—			1,951
Earnings from continuing operations before income taxes	77,331		17,538		—			94,869
Income taxes	33,789		—		7,103		(3)	40,892
Earnings (loss) from continuing operations	$	43,542	$	17,538	$	(7,103	)	$	53,977
Basic Earnings Per Share from continuing operations	$	1.80						$	2.23
Diluted Earnings Per Share from continuing operations	$	1.76						$	2.18
Weighted average number of shares of common stock outstanding:
Basic	24,251							24,251
Diluted	24,777							24,777

 See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statement Information

2

DRS TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED

COMBINED STATEMENT OF EARNINGS

Nine Months Ended December 31, 2004

(in thousands, except per share data)

	Historical
	DRS (1)		NVEC and Affiliate (2)		Pro Forma Adjustments			Pro Forma DRS
Revenues	$	947,436	$	71,636	$	(1,334	)(4)	$	1,017,738
Costs and expenses	845,881		49,035		(1,075		)(4)(5)	893,841
Operating income (loss)	101,555		22,601		(259		)	123,897
Interest income	687		12		—			699
Interest and related expenses	27,447		—		—			27,447
Other income	455		—		—			455
Earnings from continuing operations before minority interest and income taxes	74,340		22,613		(259		)	96,694
Minority interest	1,476		—		—			1,476
Earnings (loss) from continuing operations before income taxes	72,864		22,613		(259		)	95,218
Income taxes	31,053		—		9,158		(3)	40,211
Earnings (loss) from continuing operations	$	41,811	$	22,613	$	(9,417	)	$	55,007
Basic Earnings Per Share from continuing operations	$	1.55						$	2.03
Diluted Earnings Per Share from continuing operations	$	1.51						$	1.98
Weighted average number of shares of common stock outstanding:
Basic	27,042							27,042
Diluted	27,730							27,730

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statement Information

3

DRS TECHNOLOGIES, INC.

UNAUDITED PRO FORMA CONDENSED

COMBINED STATEMENT OF EARNINGS

Nine Months Ended December 31, 2003

(in thousands, except per share data)

	Historical
	DRS (1)		NVEC and Affiliate (2)		Pro Forma Adjustments			Pro Forma DRS
Revenues	$	647,819	$	35,696	$	—		$	683,515
Costs and expenses	582,345		23,319		—		(5)	605,664
Operating income	65,474		12,377		—			77,851
Interest income	600		11		—			611
Interest and related expenses	14,689		—		—			14,689
Other income	452		—		—			452
Earnings from continuing operations before minority interest and income taxes	50,933		12,388		—			63,321
Minority interest	1,326		—		—			1,326
Earnings from continuing operations before income taxes	49,607		12,388		—			61,995
Income taxes	21,626		—		5,017		(3)	26,643
Earnings (loss) from continuing operations	$	27,981	$	12,388	$	(5,017	)	$	35,352
Basic Earnings Per Share from continuing operations	$	1.20						$	1.51
Diluted Earnings Per Share from continuing operations	$	1.17						$	1.48
Weighted average number of shares of common stock outstanding:
Basic	23,379							23,379
Diluted	23,878							23,878

See accompanying Notes to Unaudited Pro Forma Condensed Combined Financial Statement Information

4

DRS TECHNOLOGIES, INC.

NOTES TO THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENT  INFORMATION

1.The DRS columns represent the condensed consolidated statements of earnings from continuing operations of DRS for the fiscal year ended March 31, 2004, and the unaudited condensed consolidated statements of earnings from continuing operations of DRS for the nine-month periods ended December 31, 2004 and 2003.  The condensed consolidated statements of earnings for the fiscal year ended March 31, 2004 have been restated to exclude the discontinued operations of DRS Weather and DRS Broadcast.

2.The NVEC and Affiliate columns represent the combined statement of income of NVEC and Affiliate for the year ended December 31, 2003, and the unaudited combined statements of income of NVEC and Affiliate for the nine months ended September 30, 2004 and 2003.

3.The pro forma adjustment to income taxes for the year ended March 31, 2004 and the nine months ended December 31, 2004 and 2003 include the income tax effect on the historical results of operations of NVEC and Affiliate using a statutory (federal and state) income tax rate of 40.5%.  Prior to their acquisition by DRS, NVEC and Affiliate were non-taxable entities.

4.The pro forma adjustment to revenues and cost and expenses for the nine months ended December 31, 2004 represents the elimination of combined revenues and costs and expenses of NVEC and Affiliate from December 15, 2004 through December 31, 2004, the period for which NVEC and Affiliate were owned by DRS.

5.The unaudited pro forma adjustments related to the acquisition are based on preliminary purchase price allocations. Actual adjustments will be based on analyses of fair values of assets acquired and liabilities assumed, including identifiable tangible and intangible assets and deferred tax assets and liabilities as well as estimates of the useful lives of tangible and amortizable intangible assets, which will be completed after DRS obtains third–party appraisals, performs its own internal assessments and reviews all available data. The unaudited pro forma information does not reflect an estimate of amortization for acquired intangible assets, as the valuation of the acquired intangible assets is currently in process. Differences between the preliminary and final purchase price allocations could have a significant impact on the accompanying unaudited pro forma information. The Company expects to complete its purchase price allocation in the first quarter of fiscal 2006.

5