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) August 2, 2005

DYNAMICS RESEARCH CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Massachusetts

(State or Other Jurisdiction of Incorporation)

000-023479	04-2211809
(Commission File Number)	(IRS Employer Identification No.)
60 Frontage Road Andover, Massachusetts	01810
(Address of Principal Executive Offices)	(Zip Code)

(978) 475-9090

(Registrant’s Telephone Number, Including Area Code)

N/A

(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 (see General Instruction A.2. below):

     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 Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Section 2 – Financial Information
	Item 2.02. Results of Operations and Financial Condition
Section 9 – Financial Statements and Exhibits
	Item 9.01. Financial Statements and Exhibits.
SIGNATURES
Exhibit Index
Ex-99.1 Press Release dated August 2, 2005

Section 2 – Financial Information

Item 2.02. Results of Operations and Financial Condition

The information in this Current Report on 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 August 2, 2005, Dynamics Research Corporation issued a press release announcing financial results as of and for the three and six months ended June 30, 2005. A copy of the press release is attached hereto as Exhibit 99.1.

Section 9 – Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits.

     (c) Exhibits

Number

99.1 Press release dated August 2, 2005.

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)
	By:	/s/ David Keleher
		David Keleher
August 2, 2005		Senior Vice President and Chief Financial Officer

Exhibit Index

Exhibit
Number	Exhibit Name	Location
99.1	Press release dated August 2, 2005.	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 

DYNAMICS RESEARCH CORPORATION 1955-2005 DRC 50 years

60 FRONTAGE ROAD, ANDOVER, MASSACHUSETTS 01810 TEL. 978/475-9090 FAX: 978/289-1887

DYNAMICS RESEARCH CORPORATION
REPORTS HIGHER REVENUES FOR SECOND QUARTER 2005
Increase of 17% year over year

Andover, Mass.—August 2, 2005—Dynamics Research Corporation (Nasdaq: DRCO) today reported revenues of $76.2 million and net income of $3.3 million, including $1.2 million of gain from the sale of stock, for the second quarter ended June 30, 2005. Earnings per diluted share were $0.36, including $0.13 attributable to the sale of stock, for the second quarter ended June 30, 2005. This compares with revenues of $65.0 million and net income of $2.2 million, or $0.24 per diluted share, for the same period in 2004.

Regarding performance for the quarter, James P. Regan, President, Chairman and CEO, said, “I am pleased that the operating results were consistent with our expectations, demonstrating further progress towards the achievement of our business objectives.”

“During the second quarter we received several strategically important contract awards that will fuel organic growth. Our pipeline is up sharply, our win rate is strong and the outlook remains positive,” Regan added.

Given the uncertainty of timing of awards under the recently awarded DESP II contract, DRC revised guidance for 2005. The company currently estimates revenues in the range of $312 to $318 million and earnings per diluted share in the range of $1.28 to $1.33 including the $0.13 per share impact of the sale of stock during the second quarter. For the third quarter of the year the company expects to book revenues in the range of $80 to $82 million and report earnings per diluted share of $0.31 to $0.33.

The company will conduct a conference call tomorrow, August 3, 2005 at 8:30 a.m. ET to discuss its second quarter results and the outlook for 2005 in more detail. The call will be available via telephone at (800) 946-0744, 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 (888) 203-1112, passcode #6487550, beginning at 10:30 a.m. August 3, 2005 through 11:59 p.m. August 10, 2005.

About Dynamics Research Corporation

Dynamics Research Corporation is an innovative solutions provider that partners with its customers to apply proven processes and technologies. For 50 years, DRC has delivered technical and information technology services that enhance the performance and cost effectiveness of its customers’ mission critical systems. For additional information about DRC please visit the website at www.drc.com.

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, Vice President & Treasurer
	(978) 289-1545, ecaffrey@drc.com

ATTACHMENT I

DYNAMICS RESEARCH CORPORATION

RESULTS OF OPERATIONS (unaudited)

(in thousands, except share and per share data)

	Three months ended
	June 30,
	2005			2004
Contract revenue	$	74,539		$	63,065
Product sales		1,649			1,885
Total revenue		76,188			64,950
Cost of contract revenue		62,947			54,158
Cost of product sales		1,297			1,359
Selling, general and administrative expenses		6,686			4,935
Amortization of intangible assets		765			381
Total operating costs and expenses		71,695			60,833
Operating income		4,493			4,117
Interest expense, net		(1,046	)		(361	)
Other income		2,077			56
Income before provision for income taxes		5,524			3,812
Provision for income taxes		2,251			1,613
Net income	$	3,273		$	2,199
Earnings per common share
Basic	$	0.37		$	0.26
Diluted	$	0.36		$	0.24
Weighted average shares outstanding
Weighted average shares outstanding — basic		8,743,516			8,461,945
Dilutive effect of options and restricted stock grants		458,497			557,194
Weighted average shares outstanding — diluted		9,202,013			9,019,139

ATTACHMENT II

DYNAMICS RESEARCH CORPORATION

RESULTS OF OPERATIONS (unaudited)

(in thousands, except share and per share data)

	Six months ended
	June 30,
	2005			2004
Contract revenue	$	146,378		$	123,702
Product sales		3,352			3,316
Total revenue		149,730			127,018
Cost of contract revenue		123,753			105,995
Cost of product sales		2,706			2,500
Selling, general and administrative expenses		12,707			10,270
Amortization of intangible assets		1,519			762
Total operating costs and expenses		140,685			119,527
Operating income		9,045			7,491
Interest expense, net		(2,132	)		(574	)
Other income		2,102			437
Income before provision for income taxes		9,015			7,354
Provision for income taxes		3,651			3,111
Net income	$	5,364		$	4,243
Earnings per common share
Basic	$	0.62		$	0.50
Diluted	$	0.58		$	0.47
Weighted average shares outstanding
Weighted average shares outstanding — basic		8,719,577			8,428,105
Dilutive effect of options and restricted stock grants		487,458			570,234
Weighted average shares outstanding — diluted		9,207,035			8,998,339

ATTACHMENT III

DYNAMICS RESEARCH CORPORATION

CONDENSED BALANCE SHEETS

(in thousands)

	June 30,		December 31,
	2005		2004
	(unaudited)		(audited)
Assets
Cash and cash equivalents	$	814	$	925
Accounts receivable, net		36,986		45,978
Unbilled expenditures and fees on contracts in process		53,031		48,119
Prepaid expenses and other current assets		3,821		5,668
Total current assets		94,652		100,690
Property, plant and equipment, net		22,655		22,139
Goodwill		63,055		63,055
Intangible assets, net		10,000		11,519
Unbilled expenditures and fees on contracts in process		6,489		2,203
Other noncurrent assets		3,148		5,528
Total assets	$	199,999	$	205,134
Liabilities and stockholders’ equity
Current portion of long-term debt	$	8,357	$	8,357
Notes payable and revolver		3,013		10,000
Accounts payable		19,920		20,550
Accrued payroll and employee benefits		19,069		17,914
Deferred income taxes		16,321		15,418
Other accrued expenses		3,102		4,447
Discontinued operations		106		422
Total current liabilities		69,888		77,108
Long-term debt		47,306		51,485
Deferred income taxes		1,015		591
Accrued pension liability		8,409		11,336
Other long-term liabilities		6,529		3,296
Stockholders’ equity		66,852		61,318
Total liabilities and stockholders’ equity	$	199,999	$	205,134

ATTACHMENT IV

DYNAMICS RESEARCH CORPORATION

SUPPLEMENTAL INFORMATION (unaudited)

(dollars in thousands)

	Three months ended				Six months ended
	June 30,				June 30,
	2005		2004		2005		2004
Capital expenditures	$	1,208	$	1,025	$	2,426	$	2,182
Depreciation	$	966	$	898	$	1,908	$	1,772
Bookings	$	44,191	$	41,941

	June 30,
	2005		2004
Funded backlog	$	154,277	$	123,369
Employees		1,905		1,653