CALABASAS, Calif.--(BUSINESS WIRE)--April 28, 2006--National Technical Systems, Inc. (Nasdaq:NTSC), a leading provider of quality and conformance testing and managed services, announced today results for its fiscal 2006 year and fourth quarter ended January 31, 2006. For fiscal 2006, NTS improved its top-line and bottom-line results with revenues and net income increasing 4.7 percent and 74.7 percent, respectively, over the prior fiscal year. Total revenues for fiscal year 2006 were $111.5 million, with net income of $2.9 million, or $0.32 per basic share and $0.30 per diluted share, compared to total revenues of $106.5 million, with net income of $1.7 million, or $0.19 per basic share and $0.18 per diluted share, for fiscal year 2005.

These results were driven by record revenues in the Engineering & Evaluation segment, which increased by $9.7 million or 15.4% when compared to the same period in fiscal 2005, primarily due to strong testing revenues from the aerospace and defense markets. Revenues from the telecommunications market also increased as a result of additional revenues from the acquisition of the testing laboratory in Calgary, Canada, in fiscal 2005 and the acquisition of Phase Seven Laboratories in Santa Rosa, California, in fiscal 2006. These increases were partially offset by a decrease in revenues of $4.6 million in the Technical Solutions segment.

CEO William McGinnis commented: "We are extremely pleased with the Company's execution of its business plan, and we have exceeded the goals we set at the beginning of the year. This is a direct result of the unique talent and dedication of our employees. We generated the highest revenues and net income in recent years. Our goal is to keep growing our top-line and bottom-line by expanding our existing capabilities and pursuing an aggressive growth plan through acquisitions and strategic alliances. The Engineering and Evaluation backlog reflects an increase of 12.5% over the prior year end backlog. NTS, however, is experiencing some delay in the availability of test hardware due to longer customer product development cycles. This may affect operational productivity in the first quarter of fiscal 2007." McGinnis added, "In the Technical Solutions segment, we were able to reduce costs and generate a slight increase in operating income year over year, despite the decrease in revenues in that segment."

The fiscal 2006 fourth quarter shows total revenues increasing by 13.0% to $28.8 million, from $25.5 million in fiscal year 2005. Net income in fiscal 2006 increased by 95.1% to $1,147,000, or $0.13 per basic share and $0.12 per diluted share, compared to net income of $588,000, or $0.07 per basic share and $0.06 per diluted share, in fiscal year 2005.

Revenues from Engineering & Evaluation for the fiscal 2006 fourth quarter and year were $19.8 million and $72.4 million, respectively, compared to $15.8 million and $62.8 million for the year-earlier periods.

Revenues from Technical Solutions for the fiscal 2006 fourth quarter and year were $9.0 million and $39.1 million, respectively, compared to $9.7 million and $43.8 million for the year-earlier periods.

The Company's January 31, 2006 balance sheet remained strong, with cash of $4.2 million, total assets of $69.1 million and shareholders' equity of $34.4 million. Cash provided by operations was $9.5 million in fiscal year 2006 compared to $6.6 million in the prior year.

Conference Call

NTS is conducting a conference call to review the financial results on Monday, May 1, 2006 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 1-800-218-4007. A live web cast and 10-day archive of the call can be accessed at and, Event ID: 33562.

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

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 companies' services, and products and other risks identified in the companies' 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 companies undertake 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.

Condensed Consolidated Statements of Income

                     Three Months Ended        Twelve Months Ended
                        January 31,                January 31,
                    2006         2005          2006          2005
                 ------------ ------------ ------------- -------------

Net revenues     $28,817,000  $25,500,000  $111,524,000  $106,514,000
Cost of sales     21,248,000   19,416,000    84,294,000    82,827,000
                 ------------ ------------ ------------- -------------
  Gross profit     7,569,000    6,084,000    27,230,000    23,687,000

Selling, general
 expense           5,390,000    4,933,000    21,412,000    20,649,000
Equity income
 from non-
 subsidiary          (79,000)    (110,000)     (259,000)     (483,000)
                 ------------ ------------ ------------- -------------
   income          2,258,000    1,261,000     6,077,000     3,521,000
Other income
   expense, net     (313,000)    (304,000)   (1,298,000)   (1,091,000)
  Other income
   (expense)          13,000        5,000       176,000       162,000
                 ------------ ------------ ------------- -------------
Total other
 expense            (300,000)    (299,000)   (1,122,000)     (929,000)

Income before
 income taxes
 and minority
 interest          1,958,000      962,000     4,955,000     2,592,000
Income taxes         849,000      352,000     1,966,000       910,000
                 ------------ ------------ ------------- -------------

Income before
 interest          1,109,000      610,000     2,989,000     1,682,000
 interest             38,000      (22,000)      (50,000)            -
                 ------------ ------------ ------------- -------------

Net Income        $1,147,000     $588,000    $2,939,000    $1,682,000
                 ============ ============ ============= =============

Net income per
 common share:
  Basic                $0.13        $0.07         $0.32         $0.19
                 ============ ============ ============= =============
  Diluted              $0.12        $0.06         $0.30         $0.18
                 ============ ============ ============= =============

Weighted average
 common shares
 outstanding       9,175,000    9,011,000     9,125,000     8,946,000
Dilutive effect
 of stock
 options             524,000      614,000       537,000       620,000

Weighted average
 common shares
 assuming        ------------ ------------ ------------- -------------
 dilution          9,699,000    9,625,000     9,662,000     9,566,000
                 ============ ============ ============= =============

    CONTACT: National Technical Systems
             Lloyd Blonder, 818-591-0776
             BPC Financial Marketing
             John Baldissera, 800-368-1217 
                           or 949-474-4300

    SOURCE: National Technical Systems, Inc.