8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2003

DYNAMICS RESEARCH CORPORATION
(Exact name of registrant as specified in its charter)

Massachusetts	000-02479	042-2211809
(State or other jurisdiction	(Commission	(IRS Employer
of incorporation)	File Number)	Identification No.)

60 Frontage Road
Andover, MA 01810
(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (978) 475-9090

N/A
(former name or former address, if changed since last report)

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE DATED OCTOBER 28, 2003

Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.

(c) Exhibits

Number	Description
99.1	Press release dated October 28, 2003.

Item 12. Results of Operations and Financial Condition

The information in this Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the company under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

On October 28, 2003, Dynamics Research Corporation issued a press release announcing financial results for the quarter ended September 30, 2003. A copy of the press release is attached hereto as Exhibit 99.1.

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 hereunto duly authorized.

	DYNAMICS RESEARCH CORPORATION (Registrant)
Date: October 28, 2003	By:	/s/ David Keleher David Keleher Vice President and Chief Financial Officer

Exhibit Index

Exhibit
Number	Exhibit Name	Location
99.1	Press release dated October 28, 2003	Furnished herewith *

* Exhibit 99.1 attached hereto is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

EX-99.1 3 b48285drexv99w1.htm EX-99.1 PRESS RELEASE DATED OCTOBER 28, 2003

Exhibit 99.1

News Release

60 FRONTAGE ROAD, ANDOVER, MASSACHUSETTS 01810 TEL. 978/475-9090 FAX: 978/474-9204

DYNAMICS RESEARCH CORPORATION
REPORTS RECORD THIRD QUARTER 2003 REVENUES
UP 32 PERCENT OVER LAST YEAR

Andover, Mass.—October 28, 2003—Dynamics Research Corporation (Nasdaq: DRCO) today reported record revenues of $62.4 million for the third quarter ended September 30, 2003 compared with revenues of $47.2 million for the same period in 2002. Earnings from continuing operations were $2.4 million, or $0.27 per diluted share, for the third quarter of 2003. This compares with earnings from continuing operations of $2.0 million, or $0.22 per diluted share, for the quarter ended September 30, 2002.

For the nine months ended September 30, 2003, DRC reported earnings from continuing operations of $6.0 million, or $0.68 per diluted share, on revenues of $183.2 million. For the first nine months of 2002, DRC had earnings from continuing operations of $5.7 million, or $0.64 per diluted share, on revenues of $142.0 million.

For the third quarter, the company reported net income of $2.2 million or $0.25 per diluted share, which includes a loss from discontinued operations of $0.147 million, or $0.02 per diluted share, reflecting the accrual of remaining Encoder facility lease expenses. For the nine months ended September 30, 2003, net income was $4.4 million, or $0.50 per diluted share.

Regarding operating results for the quarter, James P. Regan, chairman and chief executive officer, said, “I’m pleased that we delivered another solid quarter, with continued improvement in organic revenue growth and operating margin consistent with our expectations. DRC had another productive quarter as evidenced by attainment of the Software Engineering Institute Level 3 rating, important new business activity, contributions from our acquisitions and strong cash collections.”

The company will conduct a conference call today at 1:00 p.m. ET to discuss its third quarter results and the outlook for the remainder of 2003 and 2004 in more detail. The call will be available via telephone at (800) 915-4836, and accessible via Web cast at www.drc.com. Recorded replays of the conference call will be available on Dynamics Research Corporation’s investor relations home page at www.drc.com and by telephone at (800) 428-6051, passcode #309266, beginning at 3:00 p.m. October 28, 2003 through 11:59 p.m. November 5, 2003.

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

Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Some of the statements contained or implied in this news release, may be considered forward-looking statements, that are subject to material risks and uncertainties. Actual results could differ materially from these forward-looking statements. For more detailed information concerning how risks and uncertainties could affect the company’s financial results, please refer to DRC’s report Form 10-K and other reports filed with the SEC. The company assumes no obligation to update any forward-looking information.

CONTACT: Elise P. Caffrey, Treasurer & Director, Investor Relations
(978) 475-9090, Ext. 1309

ATTACHMENT I.

DYNAMICS RESEARCH CORPORATION

RESULTS OF OPERATIONS (unaudited)

(in thousands, except share and per share data)

				Three months ended
				September 30,
				2003			2002
Contract revenue				$	60,602		$	45,633
Product sales					1,830			1,521
		Total revenue			62,432			47,154
Cost of contract revenue					51,386			38,412
Cost of product sales					1,342			1,137
Selling, engineering and administrative expenses					5,018			4,203
Amortization of intangible assets					423			136
		Total operating costs and expenses			58,169			43,888
Operating income					4,263			3,266
Other income					51			57
Interest expense, net					(182	)		(103	)
Income from continuing operations before provision for income taxes					4,132			3,220
Provision for income taxes					1,745			1,236
Income from continuing operations					2,387			1,984
Loss from discontinued operations, net of tax benefits of $100 and $118 in 2003 and 2002, respectively					(147	)		(191	)
Net income				$	2,240		$	1,793
NET INCOME PER COMMON AND EQUIVALENT SHARE
	Basic
		Income from continuing operations		$	0.29		$	0.25
		Loss from discontinued operations, net of taxes			(0.02	)		(0.03	)
			Net income per common share	$	0.27		$	0.22
	Diluted
		Income from continuing operations		$	0.27		$	0.22
		Loss from discontinued operations, net of taxes			(0.02	)		(0.02	)
			Net income per common share	$	0.25		$	0.20
	Weighted average shares outstanding
		Weighted average shares outstanding — basic			8,259,833			7,986,550
		Dilutive effect of options			735,157			952,967
		Weighted average shares outstanding — diluted			8,994,990			8,939,517

ATTACHMENT II.

DYNAMICS RESEARCH CORPORATION

RESULTS OF OPERATIONS (unaudited)

(in thousands, except share and per share data)

				Nine months ended
				September 30,
				2003			2002
Contract revenue				$	177,840		$	136,057
Product sales					5,336			5,961
		Total revenue			183,176			142,018
Cost of contract revenue					150,389			115,861
Cost of product sales					3,877			3,836
Selling, engineering and administrative expenses					16,908			12,553
Amortization of intangible assets					1,301			203
		Total operating costs and expenses			172,475			132,453
Operating income					10,701			9,565
Other income					131			60
Interest expense, net					(696	)		(186	)
Income from continuing operations before provision for income taxes					10,136			9,439
Provision for income taxes					4,159			3,766
Income from continuing operations					5,977			5,673
Loss from discontinued operations, net of tax benefit of $914 and $391 in 2003 and 2002, respectively					(1,360	)		(590	)
Loss on disposal of discontinued operations, net of tax benefit of $157 in 2003					(233	)		—
Net income				$	4,384		$	5,083
NET INCOME PER COMMON AND EQUIVALENT SHARE
	Basic
		Income from continuing operations		$	0.73		$	0.72
		Loss from discontinued operations, net of taxes			(0.19	)		(0.08	)
			Net income per common share	$	0.54		$	0.64
	Diluted
		Income from continuing operations		$	0.68		$	0.64
		Loss from discontinued operations, net of taxes			(0.18	)		(0.07	)
			Net income per common share	$	0.50		$	0.57
	Weighted average shares outstanding
		Weighted average shares outstanding — basic			8,192,299			7,928,678
		Dilutive effect of options			584,324			991,685
		Weighted average shares outstanding — diluted			8,776,623			8,920,363

ATTACHMENT III.

DYNAMICS RESEARCH CORPORATION

CONDENSED BALANCE SHEETS (unaudited)

(in thousands)

				September 30,		December 31,
				2003		2002
Assets
	Cash and cash equivalents			$	2,694	$	1,076
	Receivables				26,723		29,819
	Unbilled expenditures and fees on contracts in process				30,291		26,614
	Prepaid expenses and other current assets				5,053		1,727
	Current assets of discontinued operations				—		3,432
			Total current assets		64,761		62,668
	Property, plant and equipment, net				18,760		15,608
	Deferred income tax asset				1,501		1,559
	Goodwill				26,613		26,169
	Intangible assets, net				2,765		4,066
	Other noncurrent assets				1,475		1,275
	Noncurrent assets of discontinued operations				—		331
			Total assets	$	115,875	$	111,676
Liabilities and stockholders’ equity
	Current portion of long-term debt			$	500	$	500
	Notes payable and revolver				8,500		14,644
	Current deferred income taxes				6,907		6,524
	Accounts payable				13,066		12,334
	Accrued payroll and employee benefits				15,042		11,898
	Other accrued expenses				3,552		3,531
	Current liabilities of discontinued operations				1,143		1,009
		Total current liabilities			48,710		50,440
	Long-term debt				7,875		8,250
	Accrued pension liability				11,778		11,778
	Other long-term liabilities				931		1,399
	Long-term liabilities of discontinued operations				605		—
	Stockholders’ equity				45,976		39,809
			Total liabilities and stockholders’ equity	$	115,875	$	111,676

ATTACHMENT IV.

DYNAMICS RESEARCH CORPORATION

SUPPLEMENTAL INFORMATION (unaudited)

(dollars in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2003		2002		2003		2002
Capital expenditures — continuing operations	$	2,188	$	729	$	5,416	$	2,331
Capital expenditures — total company	$	2,188	$	803	$	5,416	$	2,442
Depreciation — continuing operations	$	689	$	585	$	2,248	$	2,247
Depreciation — total company	$	689	$	618	$	2,301	$	2,433
Bookings — continuing operations	$	51,426	$	38,505	$	181,250	$	120,304
Bookings — total company	$	51,426	$	40,521	$	183,191	$	126,451
Funded backlog — continuing operations	$	109,172	$	90,443
Funded backlog — total company	$	109,172	$	91,164

	September 30,		December 31,		September 30,
	2003		2002		2002
Employees — continuing operations		1,758		1,765		1,454
Employees — total company		1,760		1,858		1,548

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EX-99.1

EX-99.1 PRESS RELEASE DATED OCTOBER 28, 2003