WALL STEET JOURNAL INTERVIEW WITH MARK NEWMAN – DRS TECHNOLOGIES INC
28 Mar 05. MARK S. NEWMAN is Chairman of the Board, President and Chief Executive Officer of DRS Technologies, Inc. He joined the company in 1973, four years after its founding, and became President and CEO in 1994, after serving many years as the company’s Chief Financial Officer. He was named a Director in 1988, and in 1995, was elected Chairman of the Board. Under Mr. Newman’s leadership, DRS has become an established market leader on several of the most important 21st Century military platforms and holds a key position in the markets it serves. The company has grown from a small specialty electronics supplier to a highly diversified defense technology provider with annual revenues exceeding $1 billion. DRS is well positioned as one of the fastest growing defense technology companies in the world. Mr. Newman is active with many important professional organizations. He is a member of the Board of Governors of the Aerospace Industries Association, a Director of Business Executives for National Security, the Commerce and Industry Association of New Jersey and the New Jersey Technology Council, and is past Chairman of the Board of Directors of the American Electronics Association for 2004. He also serves as a member of the Navy League of the United States, the National Defense Industrial Association, the Association of the U.S. Army, and the Surface Navy Association, among other professional affiliations. Mr. Newman is a Director on the Board of Directors of Congoleum Corporation, Opticare Health Systems, REFAC Technology, Inc., and SSG Precision Optronics, Inc. He also serves as Chair of the Audit Committees of the Boards of Congoleum Corporation and Opticare Health Systems. Mr. Newman earned a Bachelor’s degree in Economics from the State University of New York at Binghamton and a Master of Business Administration degree in Financial Management from Pace University. He is also a Certified Public Accountant.
TWST: Would you begin with a brief overview of DRS Technologies?
Mr. Newman: We look at DRS Technologies today as a leading supplier of defense technology systems. We sell primarily to the US military and intelligence agencies, major aerospace and defense contractors and international military forces. Our fiscal year ends March 31, and we’ve forecast to Wall Street that we expect to generate revenues of about $1.3billion this year. We have an enterprise value of about $1.9billion, with 5,800 people in 15 states, Canada and the United Kingdom, and we’re traded on the New York Stock Exchange under the symbol of DRS. The company was founded in 1969. We did some early studies in the field of antisubmarine warfare and acoustic signal processing and then grew the business through a number of contracts so that we were doing business under prime contracts with the United States Navy. We built the company to about $10 million in annual sales, went public in 1981, continued to grow throughout the 1980s and reached a high of about $70million in revenues. Then the Berlin Wall came down, and the company shrunk in the first few years of the 1990s. For a while, a fixed-price development contract caused us some problems, but we began rebuilding the company from fiscal 1993 on. In fiscal 1995, May 1994, the present management team took over. We took a look at the industry landscape that existed in defense at that time. There was a lot of consolidation going on, we were coming off of a $48 million year and asked ourselves how we were going to stay in business. We believed the way to do it would be to become a mid-tier defense technology leader. At that time, we defined ‘mid-tier’ as about $500million in annual revenue. We were going to generate about $65 million that year, so we knew we had a long way to go. We knew we had some good internal growth prospects, but we also knew we’d have to grow through acquisition, not only to add some critical mass to the comp