VIENNA, Va., Aug. 14 /PRNewswire/ -- GRC International (NYSE: GRH), a
knowledge-based, information technology company primarily servicing the U.S.
Dept. of Defense (DoD), today reported its second consecutive quarter of
profitability.
    GRCI President and CEO Jim Roth commented: "Our earnings announcement
today clearly demonstrates that we have not only successfully executed our
plan to achieve a financial turnaround in a remarkably short period of time,
but that we have initiated renewed growth in operating profitability.  While I
do not anticipate meaningful quarter-to-quarter revenue growth in the first
quarter of the current year, we have set a goal of growing revenues 10 to
12 percent in fiscal 1998 and obtaining even higher levels of growth in
operating margins."

    Results of Continuing Operations
    GRC International revenue for the fourth quarter ended June 30, 1997, was
$31.3 million, compared with $31.2 million reported in the comparable period
last year.  Income from continuing operations in the fourth quarter of FY 1997
was $1.1 million before a $2.4 million income tax benefit.  This was a strong
reversal from the fourth quarter of the prior year when the company reported a
loss from continuing operations of $2.1 million.  The reversal was primarily
the result of charges taken in the fourth quarter of fiscal 1996 related to
the closing of one of the company's service operations.
    Including the income tax benefit, income from continuing operations for
the fourth quarter of FY 1997 was $3.5 million, or $0.37 per share.  This
compares with last year's fourth quarter loss from continuing operations of
$2.1 million, or $0.23 per share.
    On a pro forma basis, excluding the effect of the $2.4 million tax
benefit, earnings per share on a primary basis for the fourth quarter of
FY 1997 would have been $0.11 per share.
    For the fiscal year ended June 30, 1997, GRCI reported revenue of
$117.6 million, compared with revenue of $117.0 million reported for FY 1996.
Year-to-year revenue comparisons were impacted by a change in the company's
participation in a joint venture that it accounted for on a consolidated basis
through the first quarter of FY 1996.  Excluding the impact of this change,
consolidated revenues for FY 1997 increased $5.0 million, or 4.5 percent,
over FY 1996.
    Income from continuing operations for FY 1997 was $3.3 million before a
$10.6 million income tax benefit.  This compares to a loss from continuing
operations in the prior year of $700,000.
    Including the income tax benefit, income from continuing operations for
FY 1997 was $13.9 million, or $1.46 per share.  This compares with a prior
year loss from continuing operations of $700,000, or $0.08 per share.

    Results of Discontinued Operations
    During the third quarter of FY 1997, the company discontinued operation of
its Telecommunications Division and various other smaller businesses.  No
profits or losses from discontinued operations were reported in the fourth
quarter of FY 1997.  For the comparable quarter of FY 1996, losses from
discontinued operations were $14.6 million.
    For FY 1997, the loss from discontinued operations was $31.6 million.
This compares to a loss from discontinued operations in the prior year of
$16.9 million.

    Net Results
    Net income for the fourth quarter of FY 1997 was $3.5 million, or $0.37
per share.  This compares with a net loss of $16.7 million, or $1.80 per share
in the comparable quarter in the prior year.  The net loss for FY 1997 was
$17.8 million, or $1.87 per share, compared to a net loss for FY 1996 of
$17.6 million, or $1.92 per share.

    Management Discussion
    "The operational results we are reporting today position us for more
positive things to come for GRCI," said Roth.  "Our maximum contract backlog
remains near record levels demonstrating that our services are much in demand
and highly valued.  The number of new contracts and new customers our
consolidated marketing group won during fiscal 1997 are providing us with
significant opportunities to grow revenues.  Throughout the company, staff
spirit is high as we seek more challenging opportunities and greater
recognition within our target markets.
    "On the management side, I am very excited about the recent changes and
additions to our board of directors.  The move of Joseph Wright to the
chairmanship and the addition of Peter Cohen to a new board seat last month
are already having a positive impact on the way the company operates and how
it intends to pursue greater shareholder value.
    "Looking towards the future, there are still several challenges we have to
address.  From a financial perspective, the debt we are carrying will be our
number one priority.  We are examining all of the options that are open to us
and will give each of them full and careful consideration.  Throughout the
administrative side of the company, efficiencies are continuously being
evaluated and improved and we intend to implement other productivity enhancing
changes over the coming year.  For example, we have already sublet,
consolidated or closed most of the office space occupied by our commercial
business and will be continuing this effort.
    "While we hired nearly 300 high-level information technology professionals
for our funded contract work last year, we have to do even a better job this
year to meet the growing demand for our services," said Roth.  "This will be a
continuing challenge for us - as it is for every company like ours across the
country - but it is one that I feel confident that we will meet.
    "At this time, the upside for GRCI is bright," concluded Roth. "I am
looking forward to fiscal 1998 because it will be a year of renewed growth
with  a marked improvement in financial performance and the beginning of what
I believe will be many banner years to follow."
    Forward-looking statements contained in this release are subject to risks
and uncertainties that could cause actual results to differ materially.  These
risks and uncertainties include the company's dependence on continued funding
of U.S. Department of Defense programs and the company's ability to fill
required staff positions to service the contracts granted under those
programs; government contract procurement and termination risks; and other
risks described in the company's Securities and Exchange Commission filings.
    GRC International Inc., with headquarters in Vienna, Va., provides
knowledge-based professional services and high-quality technology-based
product solutions to government and commercial customers. GRCI is a publicly
traded company listed on the New York Stock Exchange under the symbol GRH.
Additional details about the company can be obtained on the Internet at
http://www.grci.com/.

                 Consolidated Condensed Statements of Income
                  (in thousands, except for per share data)

                           Three Months Ended            Twelve Months Ended
                                 June 30,                     June 30,
                            1997          1996          1997         1996

    Revenues               $31,251       $31,236     $117,599      $117,016
    Cost of services        25,020        26,003       96,123        99,344
    Indirect and other costs 4,741         7,024       16,852        17,854
    Operating profit (loss)  1,490        (1,791)       4,624          (182)
    Interest expense (net)    (421)         (303)      (1,343)         (518)
    Income (loss) from continuing
      operations before benefit
      for income taxes       1,069       (2,094)        3,281          (700)
    Benefit for income taxes 2,382            --       10,582            --
    Income (loss) from
      continuing operations  3,451       (2,094)       13,863          (700)

    Discontinued Operations:
    (Loss) from operations of
    discontinued divisions      --      (14,556)      (25,219)      (16,937)
    (Loss) on disposal of
      discontinued divisions,
      including operating
      losses during phase out   --            --       (6,394)           --
    (Loss) from discontinued
      operations                --      (14,556)      (31,613)      (16,937)
    Net income (loss)        3,451      (16,650)      (17,750)      (17,637)

    Primary Per Share Amounts:
    Income (loss) from
      continuing operations  $0.37       $(0.23)        $1.46        $(0.08)
    Net income (loss)        $0.37       $(1.80)       $(1.87)       $(1.92)
    Common shares
      and equivalents        9,422         9,250        9,514         9,172

                    Consolidated Condensed Balance Sheets
                                (in thousands)

                                          June 30,       June 30,
                                            1997          1996
    Assets
    Current assets                        $39,271         $35,279
    Net assets of discontinued ops.            --          14,752
    Property and equipment, net            10,553           9,695
    Goodwill and other intangible
      assets, net                           2,409           2,274
    Deferred software costs, net              461             467
    Deferred taxes                          8,896             240
    Deposits & other assets                 4,374           4,363

    Total assets                          $65,964         $67,070

    Liabilities and stockholders' equity
      Net liabilities of discontinued ops. $4,719              --
      Other current liabilities            18,684         $20,432
      Long-term debt                       28,153          16,527
      Other non-current liabilities         1,332           1,436
      Stockholders' equity                 13,076          28,675

    Total liabilities and
      stockholders' equity                $65,964         $67,070

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