CALABASAS, CA (December 13, 2005)….National Technical Systems, Inc. (Nasdaq: NTSC) (NTS) today announced results for its fiscal 2006 third quarter and nine months ended October 31, 2005. Net income for the quarter increased 85.0% to $590,000 as compared to $319,000 for the same period in the prior year with corresponding diluted earnings per share of $0.06 in the current period compared to $0.03 for the same quarter in the prior year. Net income for the nine months ended October 31, 2005 increased 63.8% to $1,792,000 as compared to $1,094,000 for the same period in the prior year with corresponding diluted earnings per share of $0.19 in the current period compared to $0.11 for the same period in the prior year.

Total revenues for the third quarter of fiscal 2006 increased 8.2% to $28,508,000, compared to $26,353,000 for the same period in the prior year. Total revenues for the nine months ended October 31, 2005 increased 2.1% to $82,707,000, compared to $81,014,000 for the same period in the prior year.

Gross profit margin as a percentage of sales increased from 21.8% to 23.9% for the third quarter of fiscal 2006, compared to the same period in the prior year. Gross profit margin increased from 21.7% to 23.8% for the nine months ended October 31, 2005 compared to the same period in the prior year.

CEO William C. McGinnis commented, “We are extremely pleased with this quarter’s results which were primarily attributable to the strong performance in the Engineering & Evaluation group. Revenues in this group increased by 17.3% with operating income increasing by 92.3% in the current quarter compared to the same quarter last year. Overall, our net income in the first nine months of this year exceeded the entire net income of last year. Our strategies are paying off, particularly our restructured sales organization  and our improved operations efficiencies. New orders in the Engineering and Evaluation group remain strong due to the increased demand for the evaluation of military equipment and weapons systems and increased activity in the telecommunications market”.

For the nine months ended October 31, 2005, revenues in Engineering & Evaluation increased 12.0% to $52,610,000 compared to $46,994,000 for the same period in the prior year. Gross profit margin as a percentage of sales increased from 25.9% to 27.6% for the nine months ended October 31, 2005, compared to the same period in the prior year and operating income increased 108.8% to $3,434,000, compared to $1,645,000 for the same period in the prior year.

Revenues in the Technical Solutions group decreased 4.7% to $10,400,000 for the fiscal 2006 third quarter, compared to $10,915,000 for the year-earlier period. For the nine months ended October 31, 2005, revenues decreased 11.5% to $30,097,000, compared to $34,020,000 for the same period in the prior year. Gross profit increased 11.9% to $2,020,000 for the fiscal 2006 third quarter, compared to $1,805,000 for the year-earlier period and gross profit margin as a percentage of revenues increased from 16.5% to 19.4% for the fiscal 2006 third quarter, compared to the year-earlier period. For the nine months ended October 31, 2005, gross profit decreased 5.7% to $5,131,000, compared to $5,441,000 for the same period in the prior year and gross profit margin as a percentage of revenues increased from 16.0% to 17.0% for the nine months ended October 31, 2005 compared to the same period in the prior year. Operating income in the Technical Solutions group increased 11.9% in the current quarter to $328,000, compared to $293,000 for the same period in the prior year. For the nine months ended October 31, 2005, operating income decreased to $385,000, compared to $615,000 for the same period in the prior year.

McGinnis commented, “Despite the decline in sales in the Technical Solutions group, I am encouraged by the improved gross profit and operating income results in the third quarter of fiscal 2006. This is a direct result of the on-going cross-selling efforts to clients currently being serviced by the Engineering and Evaluation group and the increase in permanent placement activity”.

For the nine months ended October 31, 2005, capital expenditures were $4.3 million and total debt was reduced by $3.0 million

Conference Call

NTS is conducting a conference call to review the financial results today at 11:00 AM Pacific Time (12:00 PM Mountain Time, 1:00 PM Central Time, 2:00 PM Eastern Time). The dial-in number for the call is 1-800-257-2101. A live web cast of the call can be accessed at www.ntscorp.com   

About National Technical Systems, Inc.

National Technical Systems, Inc. is a business-to-business services company providing organizations in the aerospace, defense, information technology (IT) and high technology markets integrated testing, certification, quality registration, systems evaluation and engineering solutions.  For additional information about National Technical Systems, visit its web site at www.ntscorp.com.

Cautionary Note Regarding Forward-Looking Statements:

The statements in this press release that relate to future plans, events or performance, are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties pertaining to customer orders, demand for services and products, development of markets for the Company’s services and products and other risks identified in the Company’s SEC filings.  Actual results, events and performance may differ materially.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.  The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Unaudited Condensed Consolidated Statements of Income

Three Months Ended Nine Months Ended
October 31, October 31,
2005 2004 2005 2004
----------- ----------- ----------- -----------

Net revenues $28,508,000 $26,353,000 $82,707,000 $81,014,000
Cost of sales 21,684,000 20,601,000 63,046,000 63,411,000
----------- ----------- ----------- -----------
Gross profit 6,824,000 5,752,000 19,661,000 17,603,000

Selling, general
and administrative
expense 5,687,000 5,182,000 16,022,000 15,716,000
Equity (income)
from non-
consolidated
subsidiary (68,000) (179,000) (180,000) (373,000)
----------- ----------- ----------- -----------
Operating income 1,205,000 749,000 3,819,000 2,260,000
Other expenses:
Interest
expense, net (338,000) (264,000) (985,000) (787,000)
Other 147,000 (6,000) 163,000 157,000
----------- ----------- ----------- -----------
Total other
expenses (191,000) (270,000) (822,000) (630,000)
----------- ----------- ----------- -----------

Income before
income taxes and
minority interest 1,014,000 479,000 2,997,000 1,630,000
Income taxes 382,000 137,000 1,117,000 558,000
----------- ----------- ----------- -----------

Income before
minority interest 632,000 342,000 1,880,000 1,072,000
Minority interest (42,000) (23,000) (88,000) 22,000
----------- ----------- ----------- -----------

Net income $ 590,000 $ 319,000 $ 1,792,000 $ 1,094,000
=========== =========== =========== ===========

Net income per
common share:
Basic $ 0.06 $ 0.04 $ 0.20 $ 0.12
=========== =========== =========== ===========
Diluted $ 0.06 $ 0.03 $ 0.19 $ 0.11
=========== =========== =========== ===========


Weighted average
common shares
outstanding 9,166,000 8,969,000 9,108,000 8,924,000
Dilutive effect of
stock options 589,000 521,000 542,000 622,000

------------ ------------ ------------ ------------
Weighted average
common shares
outstanding,
assuming dilution 9,755,000 9,490,000 9,650,000 9,546,000
=========== =========== =========== ===========

    CONTACT: National Technical Systems
Lloyd Blonder, 818-591-0776
or
BPC Financial Marketing
John Baldissera, 800-368-1217

SOURCE: National Technical Systems