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): May 4, 2004

DYNAMICS RESEARCH CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts
(State or other jurisdiction
of incorporation) 000-02479
(Commission
File Number) 042-2211809
(IRS Employer
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

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

         (c) Exhibits

Number	Description
99.1	Press release May 4, 2004.

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 May 4, 2004, Dynamics Research Corporation issued a press release announcing financial results for the quarter ended March 31, 2004. 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: May 4, 2004	By:	/s/ David Keleher
		David Keleher Vice President and Chief Financial Officer

Exhibit Index

Exhibit
Number	Exhibit Name	Location
99.1	Press release dated May 4, 2004.	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

Exhibit 99.1

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

DYNAMICS RESEARCH CORPORATION
REPORTS HIGHER REVENUES FOR FIRST QUARTER 2004

Andover, Mass.—May 4, 2004—Dynamics Research Corporation (Nasdaq: DRCO) today reported revenues of $62.1 million and earnings from continuing operations of $2.0 million, or $0.23 per diluted share, for the first quarter ended March 31, 2004. This compares with revenues of $58.6 million and earnings from continuing operations of $1.6 million, or $0.19 per diluted share, for the same period in 2003.

Regarding operating results for the quarter, James P. Regan, chairman and chief executive officer, said, “I am pleased that both the top and bottom lines were consistent with our expectations. Funded bookings of $78 million for the quarter were very strong, 26% above revenues for the quarter, resulting in more than seven months of funded backlog. I am further encouraged by strong first quarter leading indicators as evidenced by the book-to-bill ratio of 1.26, and a consistently high level of first year revenue awaiting award.”

“Our continued, focused business development activities in DRC’s identified national priority markets have resulted in an increasing pipeline of qualified opportunities and improved new business win rate. We expect these trends to continue through 2004 and beyond. Based on our results in the quarter, we are on a path to achieve record new business bookings in 2004. Our first quarter achievements, combined with the leading new business development indicators, underlie my confidence in achieving our 2004 goals,” Regan continued.

“As reported last quarter, on January 1, 2004, we placed into service a new PeopleSoft-based enterprise business system, replacing and integrating our back office systems. In the years ahead, we believe this strategically important initiative will facilitate improvements in operating effectiveness and scalability. While receivables have risen as we converted to the system during the quarter, this was expected, and we anticipate sequential declines in receivables through the rest of this year, returning to days sales outstanding of 85 or better by the end of the year,” he added.

DRC re-affirmed guidance for 2004, with revenues expected to be in the range of $260 to $268 million and earnings per diluted share from continuing operations expected to be in the range of $1.02 to $1.08. For the second quarter of the year the company expects to book revenues in the range of $64 to $67 million and report earnings per diluted share from continuing operations of $0.24 to $0.26.

The company will conduct a conference call tomorrow, May 5, 2004 at 8:30 a.m. ET to discuss its first quarter results and the outlook for 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 #351256, beginning at 10:00 a.m. May 5, 2004 through 11:59 p.m. May 12, 2004.

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.

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

Safe harbor statements under the Private Securities Litigation Reform Act of 1995: Some statements contained or implied in this news release, may be considered forward-looking statements, which by their nature are uncertain. Consequently, actual results could materially differ. For more detailed information concerning how risks and uncertainties could affect the company’s financial results, please refer to DRC’s most recent filings with the SEC. The company assumes no obligation to update any forward-looking information

###

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

ATTACHMENT I

DYNAMICS RESEARCH CORPORATION

	Three months ended
	March 31,
	2004			2003
Contract revenue	$	60,637		$	56,929
Product sales		1,431			1,677
Total revenue		62,068			58,606
Cost of contract revenue		51,837			48,152
Cost of product sales		1,141			1,253
Selling, general and administrative expenses		5,335			5,781
Amortization of intangible assets		381			455
Total operating costs and expenses		58,694			55,641
Operating income		3,374			2,965
Interest expense, net		(213	)		(277	)
Other income		381			42
Income from continuing operations before provision for income taxes		3,542			2,730
Provision for income taxes		1,498			1,098
Income from continuing operations		2,044			1,632
Loss from discontinued operations, net of taxes		—			(357	)
Loss on disposal of discontinued operations, net of taxes		—			(233	)
Net income	$	2,044		$	1,042
NET EARNINGS PER COMMON SHARE
Basic
Income from continuing operations	$	0.24		$	0.20
Loss from discontinued operations		—			(0.04	)
Loss on disposal of discontinued operations		—			(0.03	)
Net earnings per common share	$	0.24		$	0.13
Diluted
Income from continuing operations	$	0.23		$	0.19
Loss from discontinued operations		—			(0.04	)
Loss on disposal of discontinued operations		—			(0.03	)
Net earnings per common share	$	0.23		$	0.12
Weighted average shares outstanding
Weighted average shares outstanding — basic		8,394,265			8,116,515
Dilutive effect of options		608,862			529,402
Weighted average shares outstanding — diluted		9,003,127			8,645,917

ATTACHMENT II

DYNAMICS RESEARCH CORPORATION

CONDENSED BALANCE SHEETS (unaudited)

(in thousands)

	March 31,		December 31,
	2004		2003
Assets
Cash and cash equivalents	$	50	$	2,724
Accounts receivable, net of allowances		24,480		28,251
Unbilled expenditures and fees on contracts in process		50,476		34,257
Prepaid expenses and other current assets		3,245		2,145
Total current assets		78,251		67,377
Property, plant and equipment, net		20,955		20,672
Deferred income taxes		2,340		2,337
Goodwill		26,711		26,711
Intangible assets, net		1,962		2,343
Other noncurrent assets		1,924		1,630
Total noncurrent assets		53,892		53,693
Total assets	$	132,143	$	121,070
Liabilities and stockholders’ equity
Current portion of long-term debt	$	500	$	500
Notes payable and revolver		15,226		8,500
Accounts payable		14,812		13,351
Accrued payroll and employee benefits		16,062		15,657
Deferred income taxes		9,503		9,698
Other accrued expenses		2,219		2,371
Discontinued operations		823		778
Total current liabilities		59,145		50,855
Long-term debt, less current portion		7,625		7,750
Accrued pension liability		12,030		12,030
Other long-term liabilities		1,669		1,386
Discontinued operations		250		398
Total long-term liabilities		21,574		21,564
Total liabilities		80,719		72,419
Stockholders’ equity		51,424		48,651
Total liabilities and stockholders’ equity	$	132,143	$	121,070

ATTACHMENT III

DYNAMICS RESEARCH CORPORATION

SUPPLEMENTAL INFORMATION (unaudited)

(dollars in thousands)

	Three Months Ended
	March 31,
	2004		2003
Capital expenditures — continuing operations	$	1,157	$	833
Capital expenditures — total company	$	1,157	$	833
Depreciation — continuing operations	$	874	$	800
Depreciation — total company	$	874	$	840
Bookings — continuing operations	$	78,264	$	66,711
Bookings — total company	$	78,264	$	68,195

	March 31,
	2004		2003
Funded backlog — continuing operations	$	145,766	$	119,176
Funded backlog — total company	$	145,766	$	119,844
Employees — continuing operations		1,641		1,820
Employees — total company		1,641		1,910