Allied Research Corporation Snares $42.5 Million Contract From U.S. Army's Rock Island Arsenal.

VIENNA, Va.--(BUSINESS WIRE)--June 8, 1999--

Allied Research Corporation (AMEX:ALR), a diversified defense and commercial electronic security firm, said today that it had received a $42.5 million contract from the U.S. Army's Industrial Operations Command at Rock Island Arsenal. The contract was awarded to Allied Research as part of the Defense Department's Foreign Military Sales Program.

MECAR S.A., the Belgian operating unit of Allied Research, will produce the contract, consisting of advanced, extended range 120mm mortar ammunition rounds, and is expected to complete delivery during 2000.

Dr. J. R. Sculley, Chairman & Chief Executive Officer of Allied Research, said that the contract represents the first of what he expects to be a series of contracts for this ammunition which was specifically manufactured by MECAR for use in the 120mm AMS Light Armored Vehicle purchased by the customer.

"This contract represents the continuing success of MECAR in its forging of strategic alliances with major defense firms. By working closely with combat gun and vehicle producers, MECAR has been able to tailor ammunition to meet the exact operational requirements of key members of the international defense community.

"Just as importantly, the size of the contract indicates the continuing need for the type of advanced conventional ammunition that is MECAR's strong suit.

"This is fully in line with our strategic plan and operating decisions. Our diversification policy has enabled Allied Research to show strong earnings from commercial operations to help even out the peaks and valleys of defense spending. As defense outlays begin to gain strength, we can fully expect total operating results to improve, as well," Dr. Sculley added.

Allied Research Corporation is a defense and electronic security firm. Its operating units develop and produce ammunition, supply equipment performance upgrades for defense departments worldwide, and design, produce and market sophisticated electronic security and access control systems.

Certain statements contained herein are "Forward Looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because such statements include risks and uncertainties, actual results may differ materially from those expressed or implied. Factors that could cause actual results to differ materially from those expressed or implied include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.