Exhibit 99.1

DYNAMICS RESEARCH CORPORATION
REPORTS SECOND QUARTER 2006 RESULTS

Andover, Mass.—August 2, 2006—Dynamics Research Corporation (Nasdaq: DRCO), a provider of innovative engineering, technical and information technology services and solutions to federal and state governments today announced operating results for the second quarter ended June 30, 2006.

Financial Results

The company reported revenue for the second quarter of 2006 of $67.3 million, compared with $76.2 million for the same period a year ago. Net income was $0.2 million, or $0.02 per diluted share, for the quarter ended June 30, 2006, compared with $3.3 million, or $0.36 per diluted share, for the second quarter of 2005. Diluted earnings per share includes a $0.02 effect of FAS 123R for the second quarter of 2006. For the six months ended June 30, 2006 revenue was $135.5 million, compared with $149.7 million for the same period in 2005. Net income was $1.7 million, or $0.18 per diluted share, for the six months ended June 30, 2006, compared with $5.4 million, or $0.58 per diluted share, for the first six months of 2005.

Business Highlights

“Revenues for the quarter were at the high end of our expectations for the quarter and included approximately $1 million of non-recurring subcontractor revenue. From a profits viewpoint, while results were within the range of our expectations, continued investments in business development activities and higher than expected cost reduction expenses kept operating results at the lower end of guidance. The first year revenue value of new business awards in the second quarter totaled $12 million, continuing an upward trend seen in the first quarter of this year, bringing the total for the first six months of this year to $32 million, an increase of 60% over the first six months of last year.

Looking ahead, the early trends on our growth initiatives are positive, despite federal budgetary pressures. In addition to the positive results in new business awards, business development, bid and proposal activities are continuing at a heavy pace. From a profits perspective, while results were within the range of our expectations, continued investments in business development activities and higher than expected cost reduction expenses kept earnings at the lower end of guidance. We are confident these investments will result in progressive improvement in revenues and operating results going forward in the face of government funding challenges,” reported James P. Regan, DRC chairman, president and chief executive officer.

The company has recently announced several significant contract wins, including task orders for U.S. Air Force Depot work, an EAGLE contract award and an important IDIQ contract with the U.S Army Training and Doctrine Command. In addition, the company is pursuing multiple contact expansion opportunities leveraging its Lean Six Sigma and training capabilities.

Company Guidance

For the year 2006, the company estimates revenues in the range of $265 to $275 million and earnings per diluted share in the range of $0.40 to $0.50. For the third quarter of the year the company expects to book revenues in the range of $65 to $67 million and report earnings per diluted share of $0.08 to $0.10.

Conference Call

The company will conduct a second quarter 2006 conference call on Thursday, August 3, 2006 at 8:30 a.m. ET. The call will be available via telephone at (800) 946-0719, 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 #8292143, beginning at 10:00 a.m. ET August 03, 2006 through 11:59 p.m. ET August 10, 2006.

About Dynamics Research Corporation

DRC is headquartered in Andover, Massachusetts and has major offices in Vienna, Virginia and Fairborn, Ohio. The company has 27 additional field offices throughout the United States providing direct support to all branches of the Department of Defense and several state government agencies.

Dynamics Research Corporation is an innovative solutions provider that partners with its customers to apply proven processes and technologies. For more than 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 our 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.

ATTACHMENT I

DYNAMICS RESEARCH CORPORATION

RESULTS OF OPERATIONS (unaudited)

(in thousands, except share and per share data)  

	Three months ended
	June 30,
	2006			2005
Contract revenue	$	65,720		$	74,539
Product sales		1,558			1,649
Total revenue		67,278			76,188
Cost of contract revenue		58,353			62,947
Cost of product sales		1,256			1,297
Selling, general and administrative expenses		6,036			6,686
Amortization of intangible assets		703			765
Total operating costs and expenses		66,348			71,695
Operating income		930			4,493
Interest expense, net		(566	)		(1,046	)
Other income		12			2,077
Income before provision for income taxes		376			5,524
Provision for income taxes		200			2,251
Net income	$	176		$	3,273
Earnings per common share
Basic	$	0.02		$	0.37
Diluted	$	0.02		$	0.36
Weighted average shares outstanding
Basic		9,079,011			8,743,516
Diluted		9,439,954			9,202,013

ATTACHMENT II

DYNAMICS RESEARCH CORPORATION

RESULTS OF OPERATIONS (unaudited)

(in thousands, except share and per share data)  

	Six months ended
	June 30,
	2006			2005
Contract revenue	$	132,479		$	146,378
Product sales		3,012			3,352
Total revenue		135,491			149,730
Cost of contract revenue		115,229			123,753
Cost of product sales		2,554			2,706
Selling, general and administrative expenses		12,592			12,707
Amortization of intangible assets		1,405			1,519
Total operating costs and expenses		131,780			140,685
Operating income		3,711			9,045
Interest expense, net		(1,135	)		(2,132	)
Other income		351			2,102
Income before provision for income taxes		2,927			9,015
Provision for income taxes		1,277			3,651
Net income (1)	$	1,650		$	5,364
Earnings per common share
Basic (1)	$	0.18		$	0.62
Diluted (1)	$	0.18		$	0.58
Weighted average shares outstanding
Basic		9,057,556			8,719,577
Diluted		9,426,269			9,207,035

 

(1) Includes $84, or $0.01 per common share, attributable to the cumulative effect of the change in accounting principle for the adoption of SFAS 123R in 2006.

ATTACHMENT III

DYNAMICS RESEARCH CORPORATION

CONDENSED BALANCE SHEETS

(in thousands)  

	June 30,		December 31,
	2006		2005
	(unaudited)		(audited)
Assets
Cash and cash equivalents	$	329	$	1,020
Accounts receivable, net		35,840		32,894
Unbilled expenditures and fees on contracts in process		46,409		60,210
Prepaid expenses and other current assets		3,323		1,483
Total current assets		85,901		95,607
Property, plant and equipment, net		12,184		12,252
Goodwill		63,055		63,055
Intangible assets, net		7,075		8,480
Other noncurrent assets		7,629		8,359
Total assets	$	175,844	$	187,753
Liabilities and stockholders’ equity
Current portion of long-term debt	$	7,857	$	10,170
Accounts payable		21,144		25,668
Deferred income taxes		14,953		19,825
Accrued payroll and employee benefits		17,928		18,761
Other accrued expenses		3,880		6,392
Total current liabilities		65,762		80,816
Long-term debt		15,539		15,242
Other long-term liabilities		16,557		17,508
Stockholders’ equity		77,986		74,187
Total liabilities and stockholders’ equity	$	175,844	$	187,753

ATTACHMENT IV

DYNAMICS RESEARCH CORPORATION

SUPPLEMENTAL INFORMATION (unaudited)

(dollars in thousands)  

Contract revenues were earned from the following sectors:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2006		2005		2006		2005
National defense and intelligence agencies	$	53,474	$	59,978	$	108,416	$	115,992
Federal civilian agencies		9,038		8,560		16,349		17,775
State and local government agencies		2,994		5,356		7,270		11,050
Other		214		645		444		1,561
	$	65,720	$	74,539	$	132,479	$	146,378

Revenues by contract type as a percentage of contract revenue were as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2006			2005			2006			2005
Time and materials		61	%		57	%		61	%		56	%
Cost reimbursable		20	%		20	%		20	%		20	%
Fixed price, including service-type contracts		19	%		23	%		19	%		24	%
		100	%		100	%		100	%		100	%
Prime contact		69	%		66	%		68	%		68	%
Sub-contract		31	%		34	%		32	%		32	%
		100	%		100	%		100	%		100	%

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2006		2005		2006		2005
Net cash provided by operating activities	$	2,904	$	7,659	$	1,346	$	10,420
Capital expenditures	$	510	$	1,208	$	1,571	$	2,426
Depreciation	$	830	$	966	$	1,620	$	1,908
Bookings	$	60,944	$	44,191	$	131,787	$	138,633

	June 30,
	2006		2005
Funded backlog	$	128,866	$	154,277
Employees		1,610		1,905