Summary of DYNAMICS RESEARCH CORP

Item 2.02. Results of Operations and Financial Condition

Financial Results

On November 3, 2008, Dynamics Research Corporation issued a press release announcing financial results as of and for the three and nine months ended September 30, 2008. A copy of the press release is attached hereto as Exhibit 99.1.

The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and shall not be incorporated by reference into any filing of the company under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Non-GAAP Financial Measures

The attached press release contains non-GAAP financial measures. In evaluating the Company's performance, management uses certain non-GAAP financial measures to supplement consolidated financial statements prepared under generally accepted accounting principles in the United States ("GAAP").

More specifically, the Company uses the following non-GAAP financial measures:
non-GAAP operating profit, non-GAAP income before income taxes, non-GAAP provision for income taxes, non-GAAP net income and non-GAAP earnings per share.

The Company uses these measures in its public statements. Management believes these non-GAAP measures help indicate the Company's operating performance before charges that are considered by management to be outside on-going operating results. Accordingly, management uses these non-GAAP measures to gain a better understanding of the Company's comparative operating performance from period-to-period and as a basis for planning and forecasting future periods. Management believes these non-GAAP measures, when read in conjunction with the Company's GAAP financials, provide useful information to investors by offering:

Х the ability to make more meaningful period-to-period comparisons of the Company's on-going operating results;

Х the ability to better identify trends in the Company's underlying business and perform related trend analysis;

Х a higher degree of transparency for certain expenses (particularly when a specific charge impacts multiple line items);

Х a better understanding of how management plans and measures the Company's underlying business; and

Х an easier way to compare the Company's most recent results of operations against investor and analyst financial models.

The non-GAAP measures used by the Company excludes the provision for litigation charge and related tax effect that management believes is unusual and outside of the Company's on-going operations for the period presented in the press release.

These non-GAAP measures have limitations, however, because they do not include all items of income and expense that impact the Company's operations. Management compensates for these limitations by also considering the Company's GAAP results. The non-GAAP financial measures the Company uses are not prepared in accordance with, and should not be considered an alternative to, measurements required by GAAP, such as operating loss, net loss and loss per share, and should not be considered measures of the Company's liquidity. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the most directly comparable GAAP measures. In addition, these non-GAAP financial measures may not be comparable to similar measures reported by other companies.