VIENNA, Va., Jan. 22 /PRNewswire/ -- GRC International Inc. (NYSE: GRH)
today announced it has arranged up to $22 million in financing over time and
has cut its operating costs by approximately $1 million per month to provide
funding for future growth of its telecommunications businesses and further
strengthen its already profitable Professional Services Operation (PSO).  The
company believes this financing and re-deployment of resources will better
enable it to achieve its full potential.
    "As part of this cost reduction, we are re-deploying as many of our highly
skilled, technical personnel as possible to fill existing openings in our
well-established and perennially profitable Professional Services Operation,
as it continues working towards a record-setting year," said GRC International
Chairman, President and CEO Jim Roth.
    "With this capital infusion, operating expense reductions and
re-deployment of people," Roth said, "we have taken vital steps to provide
the company with the best opportunity to benefit from its investments in its
telecommunications business.  The impact of the cost reduction actions already
taken will occur over the next two quarters.
    "We have spent the last several years developing our OSU(r) Network
Interface and our NetworkVUE(TM) software, and they are now commercial
products.  We remain convinced that the markets for these products are
sizable and provide significant opportunities for the company.  We are
focusing our OSU and NetworkVUE efforts on current market opportunities and
are also actively seeking 'partners' who can assist in bringing these products
to market more rapidly.  As previously discussed, these relationships could
take the form of strategic partnerships, distributorships or licensing
agreements, or other transactions.
    The $22 million financing facility consists of a $4 million three-year
convertible debenture to be funded later this month, and an $18 million
flexible financing equity line available later this calendar year, if needed
to finance the growth of PSO or our commercial telecommunications business.
The debenture will bear interest of 5% per annum, payable quarterly in cash
or, at the option of the company, added to the principal amount of the
debenture.  The debenture is convertible into common stock at the lesser of
$11 per share or 94% of the low stock price for the three trading days
preceding conversion.  When the $18 million equity line becomes effective
later this calendar year, the company can sell up to $3 million of common
stock per quarter over a four-year period at 94% of the low stock price for
the three trading days preceding each purchase.  Drawings under the equity
line are subject to the satisfaction of certain conditions.  As part of the
financing, GRCI is issuing seven-year warrants to purchase 445,000 shares of
common stock at a 40% premium. An additional 75,000 seven-year warrants will
be issued under certain conditions.  Other provisions apply in the event of
mergers or other transactions.  The company must register for resale all
shares sold as part of the financing package.  Any offering by the investor of
shares of common stock for resale will be made only by means of a prospectus
and there will not be an offer to sell or the solicitation of an offer to buy
in any jurisdiction in which such offer or solicitation would be unlawful.
    GRC International Inc., with headquarters in Vienna, Virginia, is
internationally recognized as a leading provider of knowledge-based
professional services and high-quality technology solutions to commercial and
government customers.  The company's recently expanded telecommunications
activities include network interface products for intelligent SONET networks,
network design and simulation software as well as network design consulting
services, and customized software applications for telecommunications vendors.
GRCI is a publicly traded company listed on the New York Stock Exchange under
the symbol GRH.  Additional information about GRCI's products and services can
be viewed on the Internet at http://www.grci.com.

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