================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                 ---------------

                                    FORM 10-Q

|X|          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 2001

|_|         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934

             FOR THE TRANSITION PERIOD FROM __________ TO __________

                          COMMISSION FILE NUMBER 1-8533

                                 ---------------

                             DRS TECHNOLOGIES, INC.

              DELAWARE                                      13-2632319
  (State or other jurisdiction of                       (I.R.S. Employer
  incorporation or organization)                       Identification No.)

                   5 SYLVAN WAY, PARSIPPANY, NEW JERSEY 07054
                                 (973) 898-1500

                                 ---------------

      INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES AND EXCHANGE ACT
OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.

                              YES |X|          NO |_|

As of February 12, 2002, 16,516,350 shares of DRS Technologies, Inc. Common
Stock, $.01 par value, were outstanding.

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<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

                               -------------------

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q
                     FOR THE QUARTER ENDED DECEMBER 31, 2001

                     PART I - FINANCIAL INFORMATION                     PAGE NO.

  ITEM 1. Financial Statements

          Condensed Consolidated Balance Sheets - December 31, 2001
          and March 31, 2001 ........................................        1

          Condensed Consolidated Statements of Earnings - Three and
          Nine Months Ended December 31, 2001 and 2000 ..............        2

          Condensed Consolidated Statements of Cash Flows - Nine
          Months Ended December 31, 2001 and 2000 ...................        3

          Notes to Condensed Consolidated Financial Statements ......       4-13

  ITEM 2. Management's Discussion and Analysis of Financial Condition
          and Results of Operations .................................      14-22

  ITEM 3. Quantitative and Qualitative Disclosures About Market Risk        22

                           PART II - OTHER INFORMATION

  ITEM 1. Legal Proceedings .........................................       23

  ITEM 6. Exhibits and Reports on Form 8-K ..........................       24

SIGNATURES ..........................................................       25
<Page>

                         PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

<Table>
<Caption>
                                                                  (UNAUDITED)
                                                                  DECEMBER 31,    MARCH 31,
                                                                      2001          2001
                                                                  ------------    ---------
<S>                                                                <C>            <C>
                                     ASSETS

Current assets:
    Cash and cash equivalents                                      $ 104,112      $   2,324
    Accounts receivable, net                                         109,742         97,645
    Inventories, net of progress payments                            115,850         74,327
    Prepaid expenses and other current assets                         15,840          8,697
                                                                   ---------      ---------
                 Total current assets                                345,544        182,993
                                                                   ---------      ---------

Property, plant and equipment, less accumulated
    depreciation and amortization of $46,542 and
    $39,142 at December 31, 2001 and March 31, 2001,
    respectively                                                      53,423         37,639

Goodwill, less accumulated amortization of $13,754
    at March 31, 2001                                                 95,678         76,390

Acquired intangible assets, less accumulated amortization of
    $6,446 and $7,551 at December 31, 2001 and March 31, 2001,
    respectively                                                      36,609         32,912

Deferred income taxes and other noncurrent assets                     11,340          5,006
                                                                   ---------      ---------

                                                                   $ 542,594      $ 334,940
                                                                   =========      =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
    Current installments of long-term debt                         $   1,436      $   7,217
    Short-term bank debt                                                 760            831
    Accounts payable                                                  43,400         40,089
    Accrued expenses and other current liabilities                   101,564         91,170
                                                                   ---------      ---------
                 Total current liabilities                           147,160        139,307

Long-term debt, excluding current installments                       138,424         75,076
Other noncurrent liabilities                                           9,928          8,610
                                                                   ---------      ---------
                 Total liabilities                                   295,512        222,993
                                                                   ---------      ---------

Stockholders' equity:
Preferred Stock, no par value. Authorized 2,000,000 shares;
    no shares issued at December 31, 2001 and March 31, 2001              --             --
Common Stock, $.01 par value per share
    Authorized 30,000,000 shares; issued 16,369,073 and
    12,058,057 shares at December 31, 2001 and March 31, 2001,
    respectively                                                         164            121
Additional paid-in capital                                           193,128         72,033
Retained earnings                                                     57,777         44,025
Accumulated other comprehensive losses                                (3,807)        (3,968)
Unamortized stock compensation                                          (180)          (264)
                                                                   ---------      ---------
                 Stockholders' equity                                247,082        111,947
                                                                   ---------      ---------
Commitments and contingencies
                                                                   $ 542,594      $ 334,940
                                                                   =========      =========
</Table>

     See accompanying Notes to Condensed Consolidated Financial Statements.


                                       1
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                        (IN THOUSANDS, EXCEPT SHARE DATA)

                                   (UNAUDITED)

<Table>
<Caption>
                                          THREE MONTHS ENDED DECEMBER 31,      NINE MONTHS ENDED DECEMBER 31,
                                          -------------------------------      ------------------------------
                                               2001              2000               2001            2000
                                          -------------     -------------      ------------     -------------
<S>                                       <C>               <C>                <C>              <C>
Revenues                                  $     141,238     $      95,935      $    360,768     $     297,683

Costs and expenses                              127,360            85,844           326,503           271,934
                                          -------------     -------------      ------------     -------------

    Operating income                             13,878            10,091            34,265            25,749

Other expense (income), net                          79              (149)               64              (191)

Interest and related expenses                     3,252             2,618             7,215             9,262
                                          -------------     -------------      ------------     -------------

    Earnings before minority interest
      and income taxes                           10,547             7,622            26,986            16,678

Minority interest                                   414               375             1,040               970
                                          -------------     -------------      ------------     -------------

    Earnings before income taxes                 10,133             7,247            25,946            15,708

Income taxes                                      4,762             3,768            12,194             8,092
                                          -------------     -------------      ------------     -------------

    Net earnings                          $       5,371     $       3,479      $     13,752     $       7,616
                                          =============     =============      ============     =============

Earnings per share of common stock:

    Basic earnings per share              $        0.42     $        0.32      $       1.11     $        0.76

    Diluted earnings per share            $        0.38     $        0.28      $       1.02     $        0.66
</Table>

     See accompanying Notes to Condensed Consolidated Financial Statements.


                                       2
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

                                   (UNAUDITED)

<Table>
<Caption>
                                                                             NINE MONTHS ENDED DECEMBER 31,
                                                                           --------------------------------
                                                                              2001                   2000
                                                                           ---------               --------
<S>                                                                        <C>                     <C>
Cash flows from operating activities:
    Net earnings                                                           $  13,752               $  7,616

Adjustments to reconcile net earnings to cash
flows from operating activities:
    Depreciation and amortization                                              9,596                 12,456
    Other, net                                                                (1,121)                 1,311

Changes in assets and liabilities, net of effects from
business combinations:
    Decrease in accounts receivable                                           11,839                  4,613
    Increase in inventories                                                  (20,207)               (11,406)
    Increase in prepaid expenses and other current assets                     (6,040)                  (356)
    Increase (decrease) in accounts payable                                    3,238                 (4,739)
    Increase in accrued expenses and other current liabilities                 2,253                 12,298
    Other, net                                                                   106                  1,007
                                                                           ---------               --------

    Net cash provided by operating activities                                 13,416                 22,800

Cash flows from investing activities:
    Capital expenditures                                                     (10,487)               (10,339)
    Payments pursuant to business combinations, net of cash acquired         (72,950)                (6,979)
    Proceeds from sale of discontinued operations                                 --                  3,525
    Other, net                                                                   156                    770
                                                                           ---------               --------

    Net cash used in investing activities                                    (83,281)               (13,023)

Cash flows from financing activities:
    Borrowings on long-term debt                                             218,250                 40,651
    Repayment of borrowings of long-term debt                               (160,736)               (47,883)
    Debt issuance costs                                                       (4,664)                    --
    Proceeds from issuance of common stock                                   113,462                     --
    Proceeds from stock option exercises                                       4,801                    551
    Other financing activities, net                                              (81)                   102
                                                                           ---------               --------

    Net cash provided by financing activities                                171,032                 (6,579)
                                                                           ---------               --------

Effect of exchange rates on cash and cash equivalents                            621                  1,594
                                                                           ---------               --------

Net increase in cash and cash equivalents                                    101,788                  4,792
Cash and cash equivalents, beginning of period                                 2,324                  3,778
                                                                           ---------               --------

Cash and cash equivalents, end of period                                   $ 104,112               $  8,570
                                                                           =========               ========
</Table>

     See accompanying Notes to Condensed Consolidated Financial Statements.


                                       3
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

1.    BASIS OF PRESENTATION

      The accompanying unaudited Condensed Consolidated Financial Statements of
      DRS Technologies, Inc. and Subsidiaries (DRS or the Company) have been
      prepared in accordance with accounting principles generally accepted in
      the United States and with the instructions to Form 10-Q and Article 10 of
      Regulation S-X. The Company has continued to follow the accounting
      policies set forth in the consolidated financial statements included in
      its fiscal 2001 Annual Report on Form 10-K filed with the Securities and
      Exchange Commission, except for the April 1, 2001 adoption of the
      provisions of Statement of Financial Accounting Standards (SFAS) Nos. 133,
      "Accounting for Derivative Instruments and Hedging Activities" (see Note 8
      of Notes to Condensed Consolidated Financial Statements), 141, "Business
      Combinations", and 142, "Goodwill and Other Intangible Assets" (see Note 5
      of Notes to Condensed Consolidated Financial Statements). In the opinion
      of the Company, the interim financial information provided herein reflects
      all adjustments (consisting of normal and recurring adjustments) necessary
      for a fair presentation of the Company's consolidated financial position
      as of December 31, 2001, the results of operations for the three- and
      nine-month periods ended December 31, 2001 and 2000, and cash flows for
      the nine-month periods ended December 31, 2001 and 2000. The results of
      operations for the three- and nine-months ended December 31, 2001 are not
      necessarily indicative of the results to be expected for the full year.

      For further information, these interim financial statements should be read
      in conjunction with the Consolidated Financial Statements of the Company
      for the fiscal year ended March 31, 2001, included in the Company's Annual
      Report on Form 10-K for the fiscal year ended March 31, 2001.

2.    ISSUANCE OF COMMON STOCK

      On December 19, 2001, the Company issued 3,755,000 shares of its common
      stock in a public offering for $32.00 per share, including shares related
      to an over-allotment option that was granted to the underwriters. Upon
      closing, the Company received net proceeds of approximately $113.5
      million. The Company used approximately $24.0 million of the net proceeds
      of the offering to repay the outstanding balance of its revolving line of
      credit and retained the balance to fund future acquisitions and working
      capital needs.

3.    BUSINESS COMBINATIONS

      On September 28, 2001, DRS acquired certain assets and liabilities of the
      Sensors and Electronic Systems business (SES) of The Boeing Company
      (Boeing) (the Acquisition). The Company paid approximately $67.1 million
      in cash, subject to adjustment, for the Acquisition. In addition to the
      purchase price, the estimated costs related to the acquisition, including
      professional fees, approximated $4.0 million. SES is now operating as DRS
      Sensors & Targeting Systems, Inc. (STS), a unit of the Company's
      Electro-Optical Systems Group. STS, located in Anaheim, California, is a
      leading provider of advanced electro-optical airborne and naval
      surveillance and targeting systems, high-performance military infrared
      cooled sensor systems, and infrared uncooled sensor products for military
      and commercial applications. This acquisition broadens the Company's
      product lines and customer base of its Electro-Optical Systems Group,
      particularly in those areas associated with naval and air-based
      applications, and provides a strong complement to DRS's existing products
      in ground-based Forward Looking Infrared technology. The results of the
      acquired business have been included in the Condensed Consolidated
      Financial Statements of the Company since the acquisition date.

      The Company is in the process of obtaining third-party valuations of the
      assets acquired and the liabilities assumed, as well as performing its own
      internal assessment; thus, the preliminary allocation of the purchase
      price is subject to change. Based upon preliminary allocations, the
      Company has estimated the acquired intangible assets and goodwill to be
      approximately $16.0 million and $14.0 million, respectively, with the
      acquired intangible assets being amortized on a straight-line basis over
      20 years. It is the Company's expectation that upon completion of its
      internal assessment the preliminary allocation of purchase price to
      goodwill will increase significantly. The Company expects to complete the
      purchase price allocation in the fourth quarter of fiscal 2002. In
      connection with the Acquisition, the Company may incur costs associated
      with exiting certain activities of the acquired business, including
      severance costs.


                                       4
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

      The following unaudited pro forma financial information shows the results
      of operations for the nine months ended December 31, 2001 and the three-
      and nine-month periods ended December 31, 2000, as though the Acquisition
      had occurred on April 1, 2000. As indicated above, the Company is in the
      process of obtaining third-party valuations of the assets acquired and
      liabilities assumed, as well as performing its own internal assessment.
      This could result in a different portion of the purchase price being
      allocated to goodwill, tangible and intangible assets than has been
      assumed for purposes of this pro forma presentation. As discussed above,
      DRS has estimated acquired identifiable intangible assets to be $16.0
      million; for each $1.0 million adjustment to acquired identifiable
      intangibles assets, with an estimated 20-year useful life, amortization
      expense would increase/decrease by $50,000.

<Table>
<Caption>
                                                 (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                         THREE MONTHS ENDED
                                             DECEMBER 31,      NINE MONTHS ENDED DECEMBER 31,
                                         ------------------    -------------------------------
                                                 2000              2001               2000
                                         ------------------    -------------------------------
<S>                                          <C>               <C>                <C>
      Revenues                               $   136,087       $   414,325        $   387,142

      Net earnings                           $     3,633       $    10,451        $     3,289

      Earnings per share of common stock

         Basic earnings per share:           $      0.34       $      0.85        $      0.33

         Diluted earnings per share:         $      0.30       $      0.78        $      0.31
</Table>

      The unaudited pro forma financial information shown above 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 the dates indicated above or of the results that may be
      obtained in the future.

      Simultaneously with the Acquisition, the Company entered into a $240
      million credit agreement with Wachovia Bank, N.A. as the lead bank,
      consisting of a term loan in the aggregate principal amount of $140
      million (Term Loan) and a $100 million revolving line of credit (Line of
      Credit) (collectively referred to as the Credit Facility). There were no
      borrowings outstanding under the Company's Line of Credit as of December
      31, 2001. The maturity dates of the Term Loan and the Line of Credit are
      September 30, 2008 and September 30, 2006, respectively. The Term Loan
      requires quarterly principal payments of $350,000 beginning on December
      31, 2001. Borrowings under the Credit Facility bear interest based on
      LIBOR (London Interbank Offered Rate), United States Prime Rate or United
      States Federal Funds Rate. The Credit Facility is secured by substantially
      all of the assets of the Company. There are certain covenants and
      restrictions placed on the Company under the Credit Facility, including a
      maximum total leverage ratio and a minimum fixed charge ratio, a
      restriction on the payment of dividends on the capital stock of the
      Company, a limitation on the issuance of additional debt, a requirement
      that the Company offer to make prepayments on its term loans outstanding
      with 50% of the aggregate net cash proceeds from any equity offering, and
      certain other restrictions. In connection with its sale of common stock
      (see Note 2 above), the Company made the required prepayment offers to the
      term loan lenders; none of the lenders in the syndicate accepted such
      prepayment offers. The interest rate on the Company's outstanding Term
      Loan was approximately 5.5% at December 31, 2001.

      The Company used the $161 million of proceeds from the Credit Facility to
      acquire SES, repay the balance of the debt outstanding under DRS's
      previous credit facility with Mellon Bank, N.A. in the amount of $88.5
      million and pay for costs associated with the debt offering.

      On August 22, 2001, the Company acquired certain assets and liabilities of
      the Electro-Mechanical Systems Unit of Lockheed Martin Corporation for
      approximately $4.0 million in cash, subject to adjustment. This unit now
      operates as DRS Surveillance Support Systems, Inc. (SSS), a unit of the
      Company's Electronic Systems Group, and is located in Largo, Florida. SSS
      produces pedestals and support systems and antennae for radar and other
      surveillance sensor systems.


                                       5
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

      This acquisition provides certain product synergies and vertical business
      integration opportunities for DRS. Purchase price allocation has not yet
      been finalized, and actual purchase price allocation may differ from that
      used in these Condensed Consolidated Financial Statements. The financial
      position and results of operations of SSS were not material to those of
      the Company as of the acquisition date.

4.    INVENTORIES

      Inventories are summarized as follows:

<Table>
<Caption>
                                                       (IN THOUSANDS)
                                                  DECEMBER 31,    MARCH 31,
                                                      2001          2001
                                                   ---------      --------
<S>                                                <C>            <C>
      Work-in-process                              $ 137,047      $ 83,058
      Raw material and finished
        goods                                         14,682         7,992
                                                   ---------      --------
                                                     151,729        91,050
                                                   ---------      --------
      Less progress payments                         (35,879)      (16,723)
                                                   ---------      --------

      Total                                        $ 115,850      $ 74,327
                                                   =========      ========
</Table>

      General and administrative costs included in work-in-process were
      approximately $19.1 million and $14.5 million at December 31, 2001 and
      March 31, 2001, respectively. General and administrative expenses included
      in costs and expenses amounted to approximately $28.5 million and $17.3
      million for the three-month periods ended December 31, 2001 and 2000,
      respectively, and approximately $70.7 million and $57.5 million for the
      nine-month periods then ended. Included in those amounts are expenditures
      for internal research and development amounting to approximately $2.5
      million and $2.0 million for the fiscal quarters ended December 31, 2001
      and 2000, respectively, and approximately $7.1 million and $6.1 million,
      respectively, for the nine-month periods then ended.

5.    GOODWILL AND INTANGIBLE ASSETS

      In July 2001, the Financial Accounting Standards Board issued Statement of
      Financial Accounting Standards No. 141 and 142 (SFAS 141 and SFAS 142),
      "Business Combinations" and "Goodwill and Other Intangible Assets",
      respectively. SFAS 141 replaces Accounting Principles Bulletin (APB) 16
      and requires the use of the purchase method for all business combinations
      initiated after June 30, 2001. It also provides guidance on purchase
      accounting related to the recognition of intangible assets, noting that
      any purchase price allocated to an assembled workforce may not be
      accounted for separately, and accounting for negative goodwill. SFAS 142
      changes the accounting for goodwill from an amortization method to an
      impairment-only approach. Under SFAS 142, goodwill is tested annually and
      whenever events or circumstances occur indicating that goodwill might be
      impaired.

      The Company elected to adopt the provisions of SFAS 141 and 142 as of
      April 1, 2001. The Company has identified its reporting units to be its
      operating segments and has determined the carrying value of each reporting
      unit by assigning assets and liabilities, including the existing goodwill
      and intangible assets, to those reporting units as of April 1, 2001. Upon
      adoption of SFAS 142, amortization of goodwill recorded for business
      combinations consummated prior to July 1, 2001 ceased, and intangible
      assets acquired prior to July 1, 2001 that did not meet the criteria for
      recognition apart from goodwill under SFAS 141 were reclassified to
      goodwill. In connection with the adoption of SFAS 142, the Company was
      required to perform a transitional goodwill impairment assessment within
      six months of adoption. The Company completed its transitional goodwill
      impairment assessment in the second quarter of fiscal 2002 with no
      adjustment to its April 1, 2001 goodwill. The annual impairment test will
      be performed in the fourth quarter of each fiscal year, after completion
      of the Company's financial operating plan.


                                       6
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

The following disclosure presents certain information on the Company's acquired
intangible assets as of December 31, 2001, and March 31, 2001. All intangible
assets are being amortized over their estimated useful lives, as indicated
below, with no estimated residual values.

<Table>
<Caption>
                                                                (IN THOUSANDS)
                                        WEIGHTED AVERAGE    GROSS CARRYING   ACCUMULATED
ACQUIRED INTANGIBLE ASSETS            AMORTIZATION PERIOD       AMOUNT       AMORTIZATION   NET BALANCE
                                      -------------------   --------------   ------------   -----------
<S>                                         <C>                <C>             <C>            <C>
AS OF DECEMBER 31, 2001
Amortized acquired intangible assets:
 Technology based intangibles               21 years           $ 23,826        $ (4,856)      $ 18,970
 Customer related intangibles               20 years             19,229          (1,590)        17,639
                                                               --------        ---------      --------
                                                               $ 43,055        $ (6,446)      $ 36,609
                                                               ========        =========      ========

AS OF MARCH 31, 2001
Amortized acquired intangible assets:
 Technology based intangibles               22 years           $ 18,225        $ (4,032)      $ 14,193
 Customer related intangibles               21 years              7,630          (1,166)         6,464
 Workforce                                  16 years              7,628            (757)         6,871
 Technical infrastructure                   20 years              5,280            (638)         4,642
 Other                                      30 years              1,700            (958)           742
                                                               --------        ---------      --------
                                                               $ 40,463        $ (7,551)      $ 32,912
                                                               ========        =========      ========
</Table>

The aggregate acquired intangible amortization expense for the three- and
nine-month periods ended December 31, 2001 was approximately $535,000 and $1.2
million, respectively. The estimated acquired intangible amortization expense
for the fiscal year ending March 31, 2002 and for each of the subsequent four
fiscal years ending March 31, 2006 is $1.8 million and $2.1 million,
respectively.


                                       7
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

The table below reconciles the change in the carrying amount of goodwill, by
operating segment, for the period from March 31, 2001 to December 31, 2001,
including the effect of the preliminary allocation of purchase price for the STS
acquisition. The Company recorded an $11.5 million reduction in goodwill in the
second quarter of fiscal 2002 in connection with the reversal of an accrual on
certain acquired contracts. The Company recorded an increase to goodwill during
the third quarter of fiscal 2002 based on management's estimates of potential
working capital adjustments associated with certain acquisitions completed in
prior fiscal years.

<Table>
<Caption>
                                                                           (IN THOUSANDS)
                                             ELECTRONIC    ELECTRO-OPTICAL    FLIGHT SAFETY AND
                                            SYSTEMS GROUP   SYSTEMS GROUP   COMMUNICATIONS GROUP       OTHER           TOTAL
                                            -------------  ---------------  --------------------      --------        --------
<S>                                           <C>             <C>               <C>                   <C>             <C>
Balance as of March 31, 2001                  $  31,450       $   20,236        $     24,661          $     43        $ 76,390
Effect of adoption of SFAS 141 and 142:
    Workforce                                        --            3,807               3,064                --           6,871
    Technical infrastructure                         --            4,642                  --                --           4,642
    Other                                            --               --                 742                --             742
Existing technology                                  --               --              (1,155)               --          (1,155)
Adjustments                                          --               --                  --               (43)            (43)
                                              ---------       ----------        -------------         ---------       ---------
Balance as of April 1, 2001                   $  31,450       $   28,685        $     27,312          $     --        $ 87,447
Acquisitions                                         --           14,055                  --                --          14,055
Adjustment on acquired contract                      --          (11,492)                 --                --         (11,492)
Working capital adjustments                          --            3,823               1,786                --           5,609
Foreign currency translation adjustment             184               --                (125)               --              59
                                              ---------       ----------        ------------          --------        --------
Balance as of December 31, 2001               $  31,634       $   35,071        $     28,973          $     --        $ 95,678
                                              =========       ==========        ============          ========        ========
</Table>

The following pro forma information reconciles the net earnings reported for the
periods ended December 31, 2001 and 2000 to adjusted net earnings reflecting the
adoption of SFAS 142:

<Table>
<Caption>
                                                                                    (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                             THREE MONTHS ENDED               NINE MONTHS ENDED
                                                                                 DECEMBER 31,                     DECEMBER 31,
                                                                         --------------------------      ---------------------------
                                                                            2001             2000           2001             2000
                                                                         ----------      ----------      ----------       ----------
<S>                                                                      <C>             <C>             <C>              <C>
      Reported net earnings                                              $    5,371      $    3,479      $   13,752       $    7,616
      Add back:
         Goodwill and related intangible amortization,
           net of tax benefit of $639 and $1,900, respectively                   --             720              --            2,142
                                                                         ----------      ----------      ----------       ----------
      Adjusted net earnings                                              $    5,371      $    4,199      $   13,752       $    9,758
                                                                         ==========      ==========      ==========       ==========

      Basic earnings per share:
      Reported net earnings                                              $     0.42      $     0.32      $     1.11       $     0.76
      Add back:
         Goodwill and related intangible amortization,
           net of tax benefit of $.06 and $.19 per share, respectively           --            0.07              --             0.20
                                                                         ----------      ----------      ----------       ----------
      Adjusted net earnings                                              $     0.42      $     0.39      $     1.11       $     0.96
                                                                         ==========      ==========      ==========       ==========
      Diluted earnings per share:
      Reported net earnings                                              $     0.38      $     0.28      $     1.02       $     0.66
      Add back:
         Goodwill and related intangible amortization,
           net of tax benefit of $.05 and $.15 per share, respectively           --            0.06              --             0.17
                                                                         ----------      ----------      ----------       ----------
      Adjusted net earnings                                              $     0.38      $     0.34      $     1.02       $     0.83
                                                                         ==========      ==========      ==========       ==========
</Table>


                                       8
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

6.    EARNINGS PER SHARE

      The following table presents the computation of basic and diluted earnings
      per share (EPS):

<Table>
<Caption>
                                                                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                                THREE MONTHS ENDED          NINE MONTHS ENDED
                                                                    DECEMBER 31,               DECEMBER 31,
                                                              ---------------------       ---------------------
                                                                2001          2000          2001          2000
                                                              -------       -------       -------       -------
<S>                                                           <C>           <C>           <C>           <C>
         Basic EPS computation:
           Net earnings                                       $ 5,371       $ 3,479       $13,752       $ 7,616
                                                              -------       -------       -------       -------
           Weighted average common shares
             outstanding                                       12,833        10,734        12,357        10,030
                                                              -------       -------       -------       -------
         Basic earnings per share                             $  0.42       $  0.32       $  1.11       $  0.76
                                                              =======       =======       =======       =======

         Diluted EPS computation:
           Net earnings                                       $ 5,371       $ 3,479       $13,752       $ 7,616
           Interest and expenses related to convertible
             debentures                                            --           124            --           560
                                                              -------       -------       -------       -------
         Adjusted net earnings                                $ 5,371       $ 3,603       $13,752       $ 8,176
                                                              -------       -------       -------       -------

         Diluted common shares outstanding:
           Weighted average common shares
             outstanding                                       12,833        10,734        12,357        10,030
           Stock options and warrants                           1,300           825         1,093           604
           Convertible debentures                                  --         1,140            --         1,702
                                                              -------       -------       -------       -------
         Diluted common shares outstanding                     14,133        12,699        13,450        12,336
                                                              -------       -------       -------       -------
         Diluted earnings per share                           $  0.38       $  0.28       $  1.02       $  0.66
                                                              =======       =======       =======       =======
</Table>

7.    COMPREHENSIVE EARNINGS

      The components of comprehensive earnings for the three- and nine-month
      periods ended December 31, 2001 and 2000 consisted of the following:

<Table>
<Caption>
                                                                                (IN THOUSANDS)
                                                                 THREE MONTHS ENDED           NINE MONTHS ENDED
                                                                     DECEMBER 31,                 DECEMBER 31,
                                                                 -------------------       -----------------------
                                                                  2001         2000          2001            2000
                                                                 ------       ------       --------        -------
<S>                                                              <C>          <C>          <C>             <C>
         Net earnings                                            $5,371       $3,479       $ 13,752        $ 7,616
         Other comprehensive earnings (losses):
            Foreign currency translation adjustments                149          245            951         (1,795)
            Unrealized losses on hedging instruments:
               Cumulative adjustment at April 1, 2001                --           --           (289)            --
               Unrealized gains (losses) arising during the
                 period                                               4           --           (501)            --
                                                                 ------       ------       --------        -------
         Comprehensive earnings                                  $5,524       $3,724       $ 13,913        $ 5,821
                                                                 ======       ======       ========        =======
</Table>

      At December 31, 2001, accumulated other comprehensive losses totaled
      approximately $3.8 million and consisted of approximately $3.0 million and
      $790,000 for foreign currency translation adjustments and unrealized
      losses on hedging instruments, respectively. At March 31, 2001, the $4.0
      million balance consisted of foreign currency translation adjustments.


                                       9
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

8.    DERIVATIVE FINANCIAL INSTRUMENTS

      Effective April 1, 2001, the Company adopted SFAS 133. This Statement
      requires the recognition of all derivative instruments as either assets or
      liabilities in the consolidated balance sheet, and the periodic adjustment
      of those instruments to fair value. The classification of gains and losses
      resulting from changes in the fair values of derivatives is dependent on
      the intended use of the derivative and its resultant designation.

      The Company utilizes variable rate debt to maintain its operations and
      sustain its growth. Such variable rate borrowings expose the Company to
      interest rate risk and the related impact that changes in interest rates
      can have on the Company's earnings and on its cash flows. In an effort to
      limit its interest expense and cash flow exposure, and in accordance with
      certain covenants in DRS's previous credit facility, the Company entered
      into interest rate collar agreements with notional amounts covering a
      limited amount of the aggregate outstanding principal balance of the
      Company's term loans. The following is a summary of the Company's interest
      rate collar agreements in place as of December 31, 2001 and March 31,
      2001:

<Table>
<Caption>
                                                          (IN THOUSANDS)
                                                          NOTIONAL AMOUNT
                                                   --------------------------
                                                    DECEMBER 31,    MARCH 31,    VARIABLE RATE    CEILING     FLOOR
               EFFECTIVE DATE   EXPIRATION DATE         2001          2001            BASE         RATE        RATE
               --------------   ---------------     ------------   ----------    -------------   ---------   -------
<S>                             <C>                   <C>            <C>         <C>               <C>        <C>
               April 22, 1999   January 26, 2002      $20,000        $20,000     3 Month LIBOR     5.75%      4.80%

              January 26, 2001  January 30, 2003      $10,000        $10,000     3 Month LIBOR     6.50%      5.09%

              January 29, 2001  January 31, 2003      $10,000        $10,000     3 Month LIBOR     6.50%      5.05%
</Table>

      On April 1, 2001, in accordance with the provisions in SFAS 133, the
      Company designated its interest rate collars as cash flow hedges and
      recorded the fair value of the instruments on the balance sheet at that
      date, with a corresponding adjustment to comprehensive earnings. Due to
      the nature and characteristics of the Company's designated hedging
      instruments, all adjustments to the fair values of such instruments will
      be adjusted via comprehensive earnings. The effect of adopting SFAS 133 at
      April 1, 2001, and the amounts recorded related to its derivative
      financial instruments as of and for the three- and nine-month periods
      ended December 31, 2001, were not material to the Company's consolidated
      financial position and did not impact the Company's consolidated results
      of operations or cash flows.


                                       10
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

9.    OPERATING SEGMENTS

      DRS operates in three principal business segments on the basis of products
      and services offered: the Electronic Systems Group (ESG), the
      Electro-Optical Systems Group (EOSG), and the Flight Safety and
      Communications Group (FSCG). All other operations are grouped in "Other."
      During the first quarter of fiscal 2002, the Company's operating
      subsidiary, DRS Photronics, Inc. (DRS Photronics) was combined with DRS's
      Flight Safety and Communications Group for management purposes, based
      primarily on operational synergies. DRS Photronics had previously been
      managed as part of the Electro-Optical Systems Group. Prior-year balances
      and results of operations disclosed herein have been restated to give
      effect to this change. Information about the Company's segments for the
      fiscal periods ended December 31, 2001 and 2000 is as follows:

<Table>
<Caption>
                                                                                (IN THOUSANDS)
                                                   ESG              EOSG             FSCG            OTHER            TOTAL
                                                ---------        ---------        ---------        ---------        ---------
<S>                                             <C>              <C>              <C>              <C>              <C>
      QUARTER ENDED DECEMBER 31, 2001
       Total revenues                           $  53,160        $  60,557        $  27,606        $   2,364        $ 143,687
          Intersegment revenues                       (20)            (540)          (1,889)              --           (2,449)
                                                ---------        ---------        ---------        ---------        ---------
       External  revenues                       $  53,140        $  60,017        $  25,717        $   2,364        $ 141,238
       Operating income (loss)                  $   4,315        $   7,188        $   2,636        $    (261)       $  13,878
       Identifiable assets                      $ 125,298        $ 199,390        $ 104,290        $ 113,616        $ 542,594
       Depreciation and amortization            $     462        $   2,312        $     477        $     383        $   3,634
       Capital expenditures                     $     527        $   2,163        $     170        $     147        $   3,007

      QUARTER ENDED DECEMBER 31, 2000
       Total revenues                           $  41,912        $  34,089        $  19,663        $   2,320        $  97,984
          Intersegment revenues                      (257)             (19)          (1,773)              --           (2,049)
                                                ---------        ---------        ---------        ---------        ---------
       External  revenues                       $  41,655        $  34,070        $  17,890        $   2,320        $  95,935
       Operating income (loss)                  $   3,869        $   8,646        $  (1,668)       $    (756)       $  10,091
       Identifiable assets                      $  93,663        $ 125,037        $  90,542        $  21,883        $ 331,125
       Depreciation and amortization            $     911        $   1,784        $     868        $     349        $   3,912
       Capital expenditures                     $     217        $   2,615        $  (1,035)       $     130        $   1,927

      NINE MONTHS ENDED DECEMBER 31, 2001
       Total revenues                           $ 144,376        $ 143,227        $  71,916        $   6,848        $ 366,367
          Intersegment revenues                       (37)          (1,004)          (4,558)              --           (5,599)
                                                ---------        ---------        ---------        ---------        ---------
       External  revenues                       $ 144,339        $ 142,223        $  67,358        $   6,848        $ 360,768
       Operating income (loss)                  $  13,349        $  17,005        $   4,920        $  (1,009)       $  34,265
       Identifiable assets                      $ 125,298        $ 199,390        $ 104,290        $ 113,616        $ 542,594
       Depreciation and amortization            $   1,271        $   4,851        $   2,149        $   1,325        $   9,596
       Capital expenditures                     $   1,782        $   6,212        $   1,183        $   1,310        $  10,487

      NINE MONTHS ENDED DECEMBER 31, 2000
       Total revenues                           $ 129,137        $ 106,627        $  56,841        $   7,138        $ 299,743
          Intersegment revenues                      (257)             (30)          (1,773)              --           (2,060)
                                                ---------        ---------        ---------        ---------        ---------
       External  revenues                       $ 128,880        $ 106,597        $  55,068        $   7,138        $ 297,683
       Operating income (loss)                  $  10,131        $  17,746        $  (1,560)       $    (568)       $  25,749
       Identifiable assets                      $  93,663        $ 125,037        $  90,542        $  21,883        $ 331,125
       Depreciation and amortization            $   2,701        $   5,275        $   3,029        $   1,451        $  12,456
       Capital expenditures                     $   1,731        $   6,536        $     929        $   1,143        $  10,339
</Table>


                                       11
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

10.   SUPPLEMENTAL CASH FLOW INFORMATION

<Table>
<Caption>
                                                                        (IN THOUSANDS)
                                                                       NINE MONTHS ENDED
                                                                         DECEMBER 31,
                                                                    ---------------------
                                                                      2001         2000
                                                                    -------       -------
<S>                                                                 <C>           <C>
      Cash paid for:
        Income taxes                                                $10,470       $ 6,472
        Interest                                                    $ 6,881       $ 9,648

      Noncash Investing and Financing Activities:
        Deferred acquisition costs for business combinations        $ 2,438       $    --
        Common stock issued for business combination                $    --       $ 4,000
        Note receivable - sale of magnetic tape head business       $    --       $ 1,741
        Conversion of 9% convertible debentures                     $    --       $12,664
</Table>

11.   CONTINGENCIES

      The Company is a party to various legal actions and claims arising in the
      ordinary course of its business. In the Company's opinion, the Company has
      adequate legal defenses for each of the actions and claims and believes
      that their ultimate disposition will not have a material adverse effect on
      the Company's consolidated financial position or results of operations.

      In April and May 1998, subpoenas were issued to the Company by the United
      States Attorney for the Eastern District of New York seeking documents
      related to a governmental investigation of certain equipment manufactured
      by DRS Photronics, Inc. (DRS Photronics). These subpoenas were issued in
      connection with United States v. Tress, a criminal complaint against a
      then employee of DRS Photronics, alleging that improper test data was
      provided in connection with boresighting equipment furnished to the U.S.
      Army. On June 26, 1998, the complaint against the employee was dismissed
      without prejudice. Additional subpoenas were issued to the Company on
      August 12, 1999 and May 10, 2000, relating to the ongoing investigation of
      DRS Photronics and one or more of its then employees; however, to date, no
      charges have been made against the Company, DRS Photronics or any of the
      Company's employees. During the Government's investigation, until October
      29, 1999, DRS Photronics was unable to ship certain equipment related to
      the case, resulting in delays in the Company's recognition of revenues. On
      October 29, 1999, DRS Photronics received authorization to ship its first
      such boresighting system since the start of the investigation. The Company
      cannot assess the outcome of this investigation or the effect of this
      investigation on the Company.

      The Company is currently involved in a dispute with Spar Aerospace Limited
      (Spar) with respect to the working capital adjustment, if any, provided
      for in the purchase agreement between the Company and Spar dated as of
      September 19, 1997, pursuant to which the Company acquired, through
      certain of its subsidiaries, certain assets of Spar. On January 11, 2002,
      the Company was notified that an arbitrator awarded Spar $4,616,000
      Canadian (or approximately $2,890,000 U.S.) plus interest in respect of
      such working capital adjustment. On February 5, 2002, the Company filed a
      notice of appeal of such arbitral award with the Ontario Superior Court of
      Justice. The Company is in a dispute with Raytheon Company (Raytheon) with
      respect to the working capital adjustment, if any, provided for in the
      purchase agreement between the Company and Raytheon dated as of July 28,
      1998, pursuant to which we acquired, through certain subsidiaries, certain
      assets of Raytheon.

      On October 3, 2001, a lawsuit was filed in the United States District
      Court of the Eastern District of New York by Miltope Corporation, a
      corporation of the State of Alabama, and IV Phoenix Group, Inc., a
      corporation of the State of New York, against DRS Technologies, Inc., DRS
      Electronic Systems, Inc., and a number of individual defendants, several
      of whom are employed by DRS Electronic Systems. The plaintiffs allege
      claims against the Company of infringement of a number of patents, breach


                                       12
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

      of a confidentiality agreement, misappropriation of trade secrets, unjust
      enrichment and unfair competition. The claims relate generally to the
      activities of certain former employees of IV Phoenix Group and the hiring
      of some of those employees by DRS. The plaintiffs seek damages of not less
      than $5 million for each of the claims. The plaintiffs also allege claims
      for tortious interference with business relationships, tortious
      interference with contracts and conspiracy to breach fiduciary duty. The
      plaintiffs seek damages of not less than $47.1 million for each claim. In
      addition, plaintiffs seek punitive and treble damages, injunctive relief
      and attorney's fees. In its answer, the Company has denied the plaintiffs'
      allegations and intends to vigorously defend this action. On February 5,
      2002 the Company received plaintiffs' amended complaint which eliminated
      the patent infringement claims and added claims related to statutory and
      common law trademark infringement. Once filed, such amended complaint will
      supersede plaintiffs' original complaint. Although this action is in its
      early stages, the Company believes it has meritorious defenses and does
      not believe the action will have a material adverse effect on its earnings
      or financial condition.


                                       13
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

The following is management's discussion and analysis (MD&A) of the consolidated
financial condition and results of operations of DRS Technologies, Inc. and
Subsidiaries (hereinafter, we, us, our, the Company or DRS) as of December 31,
2001 and for the three- and nine-month periods ended December 31, 2001 and 2000.
This discussion should be read in conjunction with the audited March 31, 2001
Consolidated Financial Statements and related notes.

The following discussion and analysis contains certain forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements in this report are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Persons reading this report
are cautioned that risks and uncertainties are inherent to forward-looking
statements. Accordingly, our actual results could differ materially from those
suggested by such forward-looking statements. Risks include, without limitation:
the effect of our acquisition strategy on future operating results; the
uncertainty of acceptance of new products and successful bidding for new
contracts; the effect of technological changes or obsolescence relating to our
products and services; and the effects of government regulation or shifts in
government policy, as they may relate to our products and services.

ISSUANCE OF COMMON STOCK

On December 19, 2001, we issued 3,755,000 shares of our common stock in a public
offering for $32.00 per share, including shares related to an over-allotment
option that was granted to our underwriters. Upon closing, we received net
proceeds of approximately $113.5 million. We used approximately $24.0 million of
the net proceeds of the offering to repay the outstanding balance of our
revolving line of credit and retained the balance to fund future acquisitions
and working capital needs.

BUSINESS COMBINATIONS

On September 28, 2001, we acquired certain assets and liabilities of the Sensors
and Electronic Systems (SES) business of The Boeing Company (Boeing). We paid
approximately $67.1 million in cash, subject to adjustment, for the acquisition.
Based upon preliminary allocations, we have estimated the acquired intangible
assets and goodwill to be approximately $16.0 million and $14.0 million,
respectively, with the acquired intangible assets being amortized on a
straight-line basis over 20 years. SES is now operating as DRS Sensors &
Targeting Systems, Inc. (STS), a unit of our Electro-Optical Systems Group. STS,
located in Anaheim, California, is a leading provider of advanced
electro-optical airborne and naval surveillance and targeting systems,
high-performance military infrared cooled sensor systems, and infrared uncooled
sensor products for military and commercial applications. This acquisition
broadens our product lines and customer base of our Electro-Optical Systems
Group, particularly in those areas associated with naval and air-based
applications, and provides a strong complement to our existing products in
ground-based Forward Looking Infrared technology. The results of the acquired
business have been included in our Condensed Consolidated Financial Statements
since the acquisition date. Purchase price allocation has not yet been
finalized, and actual purchase price allocation may differ materially from that
used in our Condensed Consolidated Financial Statements.

On August 22, 2001, we acquired certain assets and liabilities of the
Electro-Mechanical Systems Unit of Lockheed Martin for approximately $4.0
million in cash, subject to adjustment. This unit is now operating as DRS
Surveillance Support Systems, Inc. (SSS), a unit of the Company's Electronic
Systems Group, and is located in Largo, Florida. SSS produces pedestals and
support systems and antennae for radar and other surveillance sensor systems.
This acquisition provides certain product synergies and vertical business
integration opportunities for us. Purchase price allocation has not yet been
finalized, and actual purchase price allocation may differ from that used in our
Condensed Consolidated Financial Statements. The financial position and results
of operations of SSS were not significant to us as of the acquisition date.

                                       14
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 141 and 142 (SFAS 141 and SFAS 142),
"Business Combinations" and "Goodwill and Other Intangible Assets,"
respectively. SFAS 141 replaces Accounting Principles Bulletin (APB) 16 and
requires the use of the purchase method for all business combinations initiated
after June 30, 2001. It also provides guidance on purchase accounting related to
the recognition of intangible assets, noting that any purchase price allocated
to an assembled workforce may not be accounted for separately, and accounting
for negative goodwill. SFAS 142 changes the accounting for goodwill from an
amortization method to an impairment-only approach. Under SFAS 142, goodwill
will be tested annually and whenever events or circumstances occur indicating
that goodwill might be impaired.

We elected to adopt the provisions of SFAS 141 and 142 as of April 1, 2001. We
have identified our reporting units to be our operating segments, and we have
determined the carrying value of each reporting unit by assigning assets and
liabilities, including the existing goodwill and intangible assets, to those
reporting units as of April 1, 2001. Upon adoption of SFAS 142, amortization of
goodwill recorded for business combinations consummated prior to April 1, 2001
ceased, and intangible assets acquired prior to April 1, 2001 that did not meet
the criteria for recognition apart from goodwill under SFAS 141 were
reclassified to goodwill. We completed our transitional goodwill impairment
assessment in the second quarter of fiscal 2002 with no adjustment to our April
1, 2001 goodwill necessary. The annual impairment test will be performed in the
fourth quarter of each fiscal year, after completion of our financial operating
plan.

In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 144, (SFAS 144), "Accounting for the
Impairment or Disposal of Long-Lived Assets." SFAS 144 supersedes SFAS 121 but
retains its fundamental provisions for the (a) recognition / measurement of
impairment of long-lived assets to be held and used, and (b) measurement of
long-lived assets to be disposed of by sale. SFAS 144 also supersedes the
accounting / reporting provisions of APB 30 for segments of a business to be
disposed of, but retains the requirement to report discontinued operations
separately from continuing operations and extends that reporting to a component
of an entity that either has been disposed of or is classified as held for sale.
SFAS 144 is effective for us on April 1, 2002. We do not expect the adoption of
this standard to have a material impact on our financial statements.

RESULTS OF OPERATIONS

Our operating cycle is long-term and involves various types of production
contracts and varying production delivery schedules. We review cost performance
and estimates to complete on our long-term contracts at least quarterly and in
many cases more frequently. Due to uncertainties inherent in the estimating
process, it is reasonably likely that our costs to complete will be revised in
the near term. If the estimated cost to complete a contract changes from the
previous estimate, we will record a positive or negative adjustment to earnings
in the current period. Our results of operations have fluctuated in the past and
may continue to fluctuate in the future as a result of a number of factors, many
of which are beyond our control. These factors include the termination of a key
government contract, the size and timing of new contract awards to replace
completed or expired contracts, and changes in governmental policies and
budgetary priorities. Accordingly, results of a particular quarter or
year-to-date period may not be indicative of future operating results. The
following comparative analysis should be viewed in this context.

CONSOLIDATED SUMMARY

Consolidated revenues for the three- and nine-month periods ended December 31,
2001 increased approximately $45.3 million and $63.1 million, respectively, as
compared with the corresponding prior-year periods. The increases in revenues in
the fiscal 2002 quarter and year-to-date periods were driven by increased
shipments of our second generation infrared sighting and targeting systems,
combat display workstations, the impact of the inclusion of nine months of
revenues generated by DRS Communications Company, which we acquired at the end
of the first quarter of fiscal 2001, as well as our fiscal 2002 second quarter
acquisitions of DRS Sensors & Targeting Systems, Inc. and DRS Surveillance
Support Systems, Inc. Operating income increased approximately 38% and 33% to

                                       15
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

$13.9 million and $34.3 million, respectively, from the same three- and
nine-month periods in fiscal 2001. The increases in operating income were due
primarily to the overall increases in revenues and the impact of our fiscal 2002
first quarter adoption of SFAS 141 and SFAS 142 (see Note 5 of Notes to
Condensed Consolidated Financial Statements). In accordance with the provisions
of these standards, we ceased amortizing goodwill effective April 1, 2001. The
adoption of SFAS 141 and 142 contributed approximately $1.1 million and $3.6
million to the Company's fiscal 2002 third quarter and year-to-date operating
income, respectively. Had these standards been effective in the prior year, our
operating income would have been $1.4 million and $4.0 million higher, for the
three- and nine-month periods ended December 31, 2000, respectively. Partially
offsetting the increases in operating income were the impact of certain charges
at our operating segments. See discussion of operating segments below for
additional information.

Interest and related expenses increased approximately $634,000 for the
three-month period and decreased approximately $2.0 million for the nine-month
period ended December 31, 2001, as compared with the corresponding prior-year
periods. The increase in interest expense in the third quarter of fiscal 2002 is
a result of higher average outstanding borrowings associated with our
acquisitions in the second quarter of fiscal 2002 and interest on estimated
working capital adjustments, offset, in part, by lower interest rates on our
borrowings. The decrease in interest expense in the year-to-date period ended
December 31, 2001 was primarily the result of an overall decrease in average
working capital borrowings outstanding during the nine-month period ended
December 31, 2001, as compared with the corresponding prior-year period, the
favorable impact of the conversion of all of our 9% Senior Subordinated
Convertible Debentures during the second half of fiscal 2001, and an overall
decrease in weighted average interest rates in fiscal 2002, as compared with
fiscal 2001. As of December 31, 2001, we had no borrowings outstanding under our
revolving credit facility. See Financial Condition and Liquidity below for
additional information.

The provision for income taxes for the quarter- and year-to-date periods ended
December 31, 2001 reflects an annual estimated effective income tax rate of
approximately 47%, as compared with 52% and 51%, respectively, in the comparable
prior-year periods of fiscal 2001. The decrease in our effective tax rate is
primarily due to the adoption of SFAS 142. It is anticipated that the Company's
effective tax rate may also decline moderately in future years as the Company
continues to grow.

Earnings before interest, income taxes, depreciation and amortization (EBITDA)
for the three- and nine-month periods ended December 31, 2001 were $17.0 million
and $42.8 million, respectively, increases of approximately 24% and 15% over the
corresponding prior-year periods, respectively. We present EBITDA as additional
information because we believe it to be a useful indicator of our ability to
meet debt service and capital expenditure requirements. EBITDA, as we define it,
may differ from similarly named measures used by other entities.

OPERATING SEGMENTS

We operate in three principal business segments on the basis of products and
services offered: the Electronic Systems Group (ESG), the Electro-Optical
Systems Group (EOSG), and the Flight Safety and Communications Group (FSCG). All
other operations are grouped in "Other."

During the first quarter of fiscal 2002, one of our operating subsidiaries, DRS
Photronics, Inc., (DRS Photronics) was combined with DRS' Flight Safety and
Communications Group for management purposes based primarily on operational
synergies. DRS Photronics previously had been managed as part of the
Electro-Optical Systems Group. Prior-year balances and results of operations
disclosed in this MD&A have been restated to give effect to this change.


                                       16
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

ELECTRONIC SYSTEMS GROUP

Our Electronic Systems Group is a leader in the development, production and
support of high-performance combat display workstations used by the U.S. Navy.
In addition, we supply the military and intelligence communities with signal
processing systems and computer systems adapted or "ruggedized" for harsh
environments. By incorporating advanced commercial computing technology, we
provide rapidly fielded and cost-effective system solutions to enhance the
military's ability to attain information dominance in land, sea and air
applications. Our systems are used by the U.S. Navy and other military and
intelligence communities and are deployed on a number of front-line platforms,
including DDG-51 Aegis destroyers and cruisers, aircraft carriers, submarines
and surveillance aircraft. Our family of rugged computer products is also used
in the U.S. Army's ongoing battlefield digitization program.

ELECTRO-OPTICAL SYSTEMS GROUP

We are a leading provider of sophisticated thermal imaging, targeting and
surveillance systems. Our Electro-Optical Systems Group is one of only two key
suppliers to the U.S. government for advanced focal plane array technology,
high-performance military infrared cooled sensor systems and infrared uncooled
sensor products for military and commercial applications. We design, manufacture
and market thermal imaging systems that allow the operator to detect, identify
and target objects based upon their infrared signatures under adverse
conditions, such as darkness, fog, smoke and dust. These systems are used in the
U.S. Army's battlefield platforms that include the M1A2 Abrams Main Battle Tank,
the M2A3 Bradley Fighting Vehicle, the HMMWV scout vehicle, Kiowa Helicopter and
the Javelin missile program. These systems are also used in U.S. Navy platforms
including cruisers, destroyers and aircraft carriers. We also design and
manufacture eye-safe laser range finders. In addition to military applications,
we are leveraging our technology base by expanding our products into related
non-defense markets. For example, we manufacture electro-optical modules used in
commercial corrective laser eye surgery devices.

FLIGHT SAFETY AND COMMUNICATIONS GROUP

Our Flight Safety and Communications Group supplies airborne deployable
recorders, and surveillance and communications systems. We are the leading
manufacturer of deployable flight emergency, or "black box," voice and data
recording equipment for the U.S. and international militaries, as well as for
commercial customers. The recorder ejects automatically from an aircraft prior
to impact and emits a beacon signal, minimizing the damage to the recorder's
data and facilitating its recovery. We have provided over 4,000 deployable
recorders for military and search and rescue aircraft. We also manufacture
integrated naval ship communications systems, information management systems,
coastal border surveillance radar systems, ultra high-speed digital imaging
systems and multiple-platform weapons calibration systems for diverse air
platforms, such as the AH-64 Apache attack helicopter and the AC-130U gunship.
In addition, we provide electronics manufacturing services, often with
value-added engineering content, to the defense and space industries.

OTHER

"Other" includes the activities of DRS Corporate Headquarters and DRS Ahead
Technology. DRS Ahead Technology is a commercial operation that produces
magnetic head components used in the manufacturing process of computer disk
drives, which burnish and verify the quality of disk surfaces. DRS Ahead
Technology also services and manufactures magnetic video recording heads used in
broadcast television equipment.

                                       17
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

The following tables set forth, by operating segment, revenues, operating
income and operating margin, and the percentage increase or decrease of those
items as compared with the prior period:

<Table>
<Caption>
                                              (IN THOUSANDS, EXCEPT FOR PERCENTAGES)
                                                THREE MONTHS                                  NINE MONTHS
                        THREE MONTHS ENDED      ENDED PERCENT       NINE MONTHS ENDED        ENDED PERCENT
                            DECEMBER 31,           CHANGES             DECEMBER 31,             CHANGES
                      -----------------------   -------------   -------------------------    -------------
                        2001           2000     2001 VS. 2000      2001           2000       2001 VS. 2000
                      --------       --------   -------------   ---------       ---------    -------------
<S>                   <C>            <C>             <C>        <C>             <C>              <C>
ESG

External revenues     $ 53,140       $ 41,655        27.6%      $ 144,339       $ 128,880        12.0%

Operating income      $  4,315       $  3,869        11.5%      $  13,349       $  10,131        31.8%

Operating margin           8.1%           9.3%      (12.9%)           9.2%            7.9%       16.5%

EOSG

External revenues     $ 60,017       $ 34,070        76.2%      $ 142,223       $ 106,597        33.4%

Operating income      $  7,188       $  8,646       (16.9%)     $  17,005       $  17,746        (4.2%)

Operating margin          12.0%          25.4%      (52.8%)          12.0%           16.6%      (27.7%)

FSCG

External revenues     $ 25,717       $ 17,890        43.8%      $  67,358       $  55,068        22.3%

Operating income      $  2,636       $ (1,668)      258.0%      $   4,920       $  (1,560)      415.4%

Operating margin          10.3%          (9.3%)     210.8%            7.3%           (2.8%)     360.7%

OTHER
External revenues     $  2,364       $  2,320         1.9%      $   6,848       $   7,138        (4.1%)

Operating loss        $   (261)      $   (756)       65.5%      $  (1,009)      $    (568)      (77.6%)

Operating margin         (11.0%)        (32.6%)      66.3%          (14.7%)          (8.0%)     (83.8%)
</Table>

ELECTRONIC SYSTEMS GROUP:

THREE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 2000

Revenues increased $11.5 million, or 28%, to $53.1 million in the third quarter
of fiscal 2002, as compared with the third quarter of fiscal 2001. Operating
income increased $446,000 to $4.3 million. The increase in revenues was due
primarily to increased shipments of combat display workstations and components,
as well as approximately $3.0 million of revenue contributed by DRS Surveillance
Support Systems, Inc., which we acquired during the second quarter of this
fiscal year. These increases were partially offset by decreases in revenues from
certain search and navigation radar and rugged computer peripherals. The
increase in third quarter operating income was due to the favorable impact of
the elimination of approximately $450,000 in goodwill amortization, offset in
part by unfavorable operating margins in the group's U.K. operations, and a
change in product mix, primarily in the sale of rugged computers and
peripherals. Had SFAS 142 been effective in the prior year, operating income
would have been $485,000 higher for the three-month period ended December 31,
2000.

                                       18
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

ELECTRONIC SYSTEMS GROUP (CONTINUED):

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH NINE MONTHS ENDED DECEMBER 31,
2000

Revenues increased $15.5 million, or 12%, to $144.3 million in the nine-month
period ended December 31, 2001, as compared with the corresponding prior year
period. Operating income increased $3.2 million to $13.3 million. The primary
drivers of the net revenue growth in the year-to-date period ended December 31,
2001 are consistent with the programs identified above in THREE MONTHS ENDED
DECEMBER 31, 2001 COMPARED WITH THREE MONTHS ENDED DECEMBER 31, 2000. The
acquisition of DRS Surveillance Support Systems, Inc. contributed $4.4 million
revenues to the Group's year-to-date operating results. The increase in fiscal
2002 year-to-date operating income was due to the net increase in revenues and
the favorable impact of the elimination of approximately $1.3 million in
goodwill amortization. Partially offsetting the increase in operating income
were unfavorable operating margins in the group's U.K. operations and a change
in product mix, primarily in the sale of rugged computers and peripherals. Had
SFAS 142 been effective in the prior year, operating income would have been $1.5
million higher for the nine-month period ended December 31, 2000.

ELECTRO-OPTICAL SYSTEMS GROUP:

THREE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 2000

Revenues increased $25.9 million, or 76%, to $60.0 million in the third quarter
of fiscal 2002, as compared with the third quarter of fiscal 2001. Operating
income decreased $1.5 million to $7.2 million. The increase in revenues was
driven by growth in our second generation infrared targeting and imaging systems
programs and approximately $19.0 million in revenues generated by programs
acquired with our purchase of the Sensors and Electronic Systems business of The
Boeing Company. The decrease in fiscal 2002 third quarter operating income, as
compared with the corresponding prior year period, is attributable to the fact
that the third quarter of fiscal 2001 included the favorable impact of a $5.2
million cumulative profit adjustment. Fiscal 2002 third quarter operating income
was positively impacted by the elimination of approximately $307,000 of goodwill
amortization, due to the adoption of SFAS 142. Had SFAS 142 been effective in
the prior year, operating income would have been $521,000 higher for the
three-month period ended December 31, 2000.

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH NINE MONTHS ENDED DECEMBER 31,
2000

Revenues increased $35.6 million, or 33%, to $142.2 million in the nine-month
period ended December 31, 2001, as compared with the corresponding prior year
period. Operating income decreased $741,000 to $17.0 million. The increase in
revenues was driven by growth in our second generation infrared targeting and
imaging systems programs and approximately $19.0 million in revenues generated
by programs acquired with our purchase of the Sensors and Electronic Systems
business of The Boeing Company. The decrease in fiscal 2002 year-to-date
operating income, as compared with the corresponding prior-year period, is
attributable to the fact that the year-to-date period ended December 31, 2000
included the favorable impact of $6.3 million of cumulative profit adjustments,
offset in part by charges of $880,000 for revisions to estimates to complete on
certain programs. Partially offsetting the fiscal 2002 year-to-date decrease in
operating income, as compared with the prior-year period, is the positive impact
of the elimination of approximately $1.2 million of goodwill amortization due to
the adoption of SFAS 142. Had SFAS 142 been effective in the prior year,
operating income would have been $1.6 million higher for the nine-month period
ended December 31, 2000.

                                       19
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

FLIGHT SAFETY AND COMMUNICATIONS GROUP:

THREE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH THREE MONTHS ENDED DECEMBER
31, 2000

Revenues increased $7.8 million, or 44%, to $25.7 million in the third quarter
of fiscal 2002, as compared with the third quarter of fiscal 2001. Operating
income increased $4.3 million to $2.6 million. The growth in revenues was due to
greater volume in the group's contract manufacturing business, as well as
increased shipments of acoustic data recorders, ultra-high speed cameras and
communications data links. The increase in operating income is a result of the
overall increase in revenues, higher operating margins, as compared to the
corresponding prior-year period, and the elimination of goodwill amortization.
The three-month period ended December 31, 2000 included charges of approximately
$2.1 million for excess inventories for a specific product line, additional
costs on a development contract as well as costs associated with a vacated
facility. The elimination of goodwill amortization contributed approximately
$347,000 in operating income to the FSCG operating segment in the three-month
period ended December 31, 2001. Had SFAS 142 been effective in the prior year,
operating income would have been $341,000 higher for the three-month period
ended December 31, 2000.

NINE MONTHS ENDED DECEMBER 31, 2001 COMPARED WITH NINE MONTHS ENDED DECEMBER 31,
2000

Revenues increased $12.3 million, or 22%, to $67.4 million in the nine-month
period ended December 31, 2001, as compared with the corresponding prior year
period. Operating income increased $6.5 million to $4.9 million. The revenue
increase was driven primarily by greater volume in contract manufacturing,
infrared search and tracking systems, and the impact of the inclusion of nine
months of revenues generated by DRS Communications Company, which we acquired at
the end of the first quarter of fiscal 2001. The growth in operating income was
a result of the increase in revenues, the elimination of goodwill amortization,
offset in part by charges of approximately $765,000 associated with shutting
down the group's Santa Clara, California production and engineering facility.
FSCG's operating results for the nine-months ended December 31, 2000 included
charges of approximately $2.1 million, as discussed above. The elimination of
goodwill amortization contributed approximately $1.0 million in operating income
to the group in the nine-month period ended December 31, 2001. Had SFAS 142 been
effective in the prior year, operating income would have been $938,000 higher
for the nine-month period ended December 31, 2000.

OTHER: Revenues for the three- and nine-month periods ended December 31, 2001
increased 2% and decreased 4%, respectively, as compared with the corresponding
prior year periods. Operating loss decreased $495,000 and increased $441,000 in
the three- and nine-months ended December 31, 2001, respectively, as compared
with the prior-year periods. The three-month period ended December 31, 2000
included a $500,000 charge for a potential loss associated with a note
receivable. The disk drive marketplace continues to be sluggish, with
inconsistent demand and narrow operating margins limiting growth in this
business.

                                       20
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

FINANCIAL CONDITION AND LIQUIDITY

CASH AND CASH FLOW

The following table provides cash flow data for the Company for the nine-month
periods ended December 31, 2001 and 2000:

                                                          (IN THOUSANDS)
                                                  NINE MONTHS ENDED DECEMBER 31,
                                                  ---------            --------
                                                     2001                2000
                                                  ---------            --------
Net cash provided by operating activities         $  13,416            $ 22,800

Net cash used in investing activities             $ (83,281)           $(13,023)

Net cash provided by financing activities         $ 171,032            $ (6,579)

Operating cash flow for the nine-month period ended December 31, 2001 decreased
by approximately $9.4 million, as compared with the corresponding prior-year
period. Increases in earnings (net of adjustments for non-cash items) and
receivable collections were more than offset by increases in inventories and
other current assets, the liquidation of customer advances and a decrease in
certain current liabilities.

Cash used in investing activities for the nine-month period ended December 31,
2001 consisted of payments made to acquire STS and SSS, including related
acquisition costs, of $68.9 million and $4.1 million, respectively. The
remaining uses were comprised of capital expenditures.

On December 19, 2001, we sold 3,755,000 shares of our common stock in a public
offering for $32.00 per share, including shares related to an over-allotment
option that was granted to our underwriters. Upon closing, we received net
proceeds of approximately $113.5 million. We used approximately $24.0 million of
the net proceeds of the offering to repay the outstanding balance of our
revolving line of credit and retained the balance to fund future acquisitions
and working capital needs.

Simultaneously with the STS Acquisition, we entered into a $240 million credit
agreement with Wachovia Bank, N.A., as the lead bank, consisting of a term loan
in the aggregate principal amount of $140 million (Term Loan) and a $100 million
revolving line of credit (Line of Credit) (collectively referred to as the
Credit Facility). There were no borrowings outstanding under our Line of Credit
as of December 31, 2001. The maturity dates of the Term Loan and the Line of
Credit are September 30, 2008 and September 30, 2006, respectively. The Term
Loan requires quarterly principal payments of $350,000 beginning on December 31,
2001. Borrowings under the Credit Facility bear interest based on LIBOR (London
Interbank Offered Rate), United States Prime Rate or United States Federal Funds
Rate. The Credit Facility is secured by substantially all of the assets of the
Company. There are certain covenants and restrictions placed on us under our
Credit Facility, including a maximum total leverage ratio and a minimum fixed
charge ratio, a restriction on the payment of dividends on the capital stock of
the Company, a limitation on the issuance of additional debt, a requirement that
we offer to make prepayments on our term loans outstanding with 50% of the
aggregate net cash proceeds from any equity offering, and certain other
restrictions. In connection with the issuance of our common stock in December
2001, we made the required prepayment offers to the term loan lenders; none of
the lenders in the syndicate accepted such prepayment offers. The interest rate
on our outstanding Term Loan was approximately 5.5% at December 31, 2001.

The proceeds of the Credit Facility of $161 million were used to acquire STS,
repay the balance of the debt outstanding under DRS's previous credit facility
with Mellon Bank, N.A. (the Mellon Facility) in the amount of $88.5 million and
pay for costs associated with the debt offering.

Under both the Mellon Facility and the current Credit Facility with Wachovia
Bank, N.A., we paid approximately $2.1 million in principal payments against our
term loans and had net borrowings under our lines of credit of approximately
$8.2 million. The borrowings under our revolving lines of credit were used to
meet temporary working capital requirements and to pay for the acquisition of
SSS. As of December 31, 2001, we had approximately $88.3 million available under

                                       21
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

the revolving Line of Credit, after satisfaction of our borrowing base
requirement.

We actively seek to finance our business in a manner that preserves financial
flexibility, while minimizing borrowing costs to the extent practicable. We
continually review the changing financial, market and economic conditions to
manage the types, amounts and maturities of our indebtedness. Cash and cash
equivalents, internally generated cash flow from operations and other available
financing resources are expected to be sufficient to meet anticipated operating,
capital expenditure and debt service requirements during the next twelve months
and the foreseeable future. Other than our long-term debt refinancing discussed
above, our other contractual obligations and commitments have not changed
materially since March 31, 2001 and are described in Note 14 to those financial
statements.

BACKLOG

Backlog represents products or services that our customers have committed by
contract to purchase from us. Our backlog at December 31, 2001 was approximately
$558.4 million, including $93.6 million and $10.8 million from the acquisitions
of STS and SSS, respectively. The backlog at March 31, 2001 was $456.5 million.
We booked approximately $378.2 million in new orders in the first nine months of
fiscal 2002.

Our backlog is subject to fluctuations and is not necessarily indicative of
future sales. Moreover, cancellations of purchase orders or reductions of
product quantities in existing contracts could substantially and materially
reduce our backlog and, consequently, future revenues. Our failure to replace
canceled or reduced backlog could result in lower revenues.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market
Risk", of our Annual Report on Form 10-K for the fiscal year ended March 31,
2001 for a discussion of our exposure to market risks. There was no significant
change in those risks during the nine months ended December 31, 2001 except for
interest rate risk.

Simultaneously with the STS Acquisition, we entered into a $240 million credit
agreement with Wachovia Bank, N.A., as the lead bank, consisting of a term loan
in the aggregate principal amount of $140 million (Term Loan) and a $100 million
revolving line of credit (Line of Credit) (collectively referred to as the
Credit Facility). Borrowings under the Credit Facility bear interest based on
LIBOR (London Interbank Offered Rate), United States Prime Rate or United States
Federal Funds Rate. Therefore, we are exposed to interest rate risk on our
variable rate borrowings. Although there were no borrowings outstanding under
our Line of Credit as of December 31, 2001, we had approximately $140 million
outstanding under our Term Loan. Excluding the notional amounts covered under
our interest rate collar agreements, a 0.125% increase/decrease in interest
rates would have resulted in an increase/decrease in interest expense of
approximately $31,000 for three-month period ended December 31, 2001. Had our
$140 Term Loan been outstanding as of April 1, 2001, a 0.125% increase/decrease
in interest rates would have resulted in an increase/decrease in interest
expense of approximately $93,000 for nine-month period ended December 31, 2001.

                                       22
<Page>

                     DRS TECHNOLOGIES, INC. AND SUBSIDIARIES

                           PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are party to various legal actions and claims arising in the ordinary course
of our business. In our opinion, we have adequate legal defenses for each of the
actions and claims, and we believe that their ultimate disposition will not have
a material adverse effect on our consolidated financial position or results of
operations.

In April and May 1998, subpoenas were issued to us by the United States Attorney
for the Eastern District of New York seeking documents related to a governmental
investigation of certain equipment manufactured by DRS Photronics, Inc. (DRS
Photronics). These subpoenas were issued in connection with United States v.
Tress, a criminal complaint against a then employee of DRS Photronics, alleging
that improper test data was provided in connection with boresighting equipment
furnished to the U.S. Army. On June 26, 1998, the complaint against the employee
was dismissed without prejudice. Additional subpoenas were issued to us on
August 12, 1999 and May 10, 2000, relating to the ongoing investigation of DRS
Photronics and one or more of our then employees; however, to date, no charges
have been made against us, DRS Photronics or any of our employees. During the
Government's investigation, until October 29, 1999, DRS Photronics was unable to
ship certain equipment related to the case, resulting in delays in our
recognition of revenues. On October 29, 1999, DRS Photronics received
authorization to ship its first such boresighting system since the start of the
investigation. We cannot assess the outcome of this investigation or the effect
of this investigation on us.

We are currently involved in a dispute with Spar Aerospace Limited (Spar) with
respect to the working capital adjustment, if any, provided for in the purchase
agreement between us and Spar dated as of September 19, 1997, pursuant to which
we acquired, through certain of our subsidiaries, certain assets of Spar. On
January 11, 2002, we were notified that an arbitrator awarded Spar $4,616,000
Canadian (or approximately $2,890,000 U.S.) plus interest in respect of such
working capital adjustment. On February 5, 2002, we filed a notice of appeal of
such arbitral award with the Ontario Superior Court of Justice. We are in a
dispute with Raytheon Company (Raytheon) with respect to the working capital
adjustment, if any, provided for in the purchase agreement between us and
Raytheon dated as of July 28, 1998, pursuant to which we acquired, through
certain subsidiaries, certain assets of Raytheon.

On October 3, 2001, a lawsuit was filed in the United States District Court of
the Eastern District of New York by Miltope Corporation, a corporation of the
State of Alabama, and IV Phoenix Group, Inc., a corporation of the State of New
York, against DRS Technologies, Inc., DRS Electronic Systems, Inc., and a number
of individual defendants, several of whom are employed by DRS Electronic
Systems. The plaintiffs allege claims against us of infringement of a number of
patents, breach of a confidentiality agreement, misappropriation of trade
secrets, unjust enrichment and unfair competition. The claims relate generally
to the activities of certain former employees of IV Phoenix Group and the hiring
of some of those employees by us. The plaintiffs seek damages of not less than
$5 million for each of the claims. The plaintiffs also allege claims for
tortious interference with business relationships, tortious interference with
contracts and conspiracy to breach fiduciary duty. The plaintiffs seek damages
of not less than $47.1 million for each claim. In addition, plaintiffs seek
punitive and treble damages, injunctive relief and attorneys' fees. In our
answer, we have denied the plaintiffs' allegations and we intend to vigorously
defend this action. On February 5, 2002 we received plaintiffs' amended
complaint which eliminated the patent infringement claims and added claims
related to statutory and common law trademark infringement. Once filed, such
amended complaint will supersede plaintiffs' original complaint. Although this
action is in its early stages, management believes it has meritorious defenses
and does not believe the action will have a material adverse effect on our
earnings or financial condition.

                                       23
<Page>

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      Exhibit No.          Description
      -----------          -----------

      None

(b)   Reports on Form 8-K

      The following report on form 8-K was filed during the quarter ending
      December 31, 2001:

            1.    Form 8-K/A filed on November 21, 2001, in connection with DRS
                  Technologies, Inc.'s acquisition of the Sensors and
                  Electronics Systems Business of The Boeing Company.

                                       24
<Page>

                                   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 13, 2002                /s/ Richard A. Schneider
                                       -----------------------------------------
                                       Richard A. Schneider
                                       EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL
                                       OFFICER AND TREASURER

                                       25