Alpha expects lower earnings in current quarter.

WOBURN, Mass.--(BUSINESS WIRE)--Oct. 1, 1996--Alpha Industries Inc. (AMEX Symbol: AHA) today announced that results for its second quarter ended Sept. 29, 1996, will be lower than previously expected, due to slower than expected receipt of new orders for ceramic products and millimeter wave digital radio components, as well as reserves for excess inventory and a loss on a large filter order at the company's ceramics subsidiary. The Company estimates that sales for the quarter will be generally flat compared with $20.1 million in the first quarter, which ended June 30, 1996.

Net loss for the second quarter is anticipated to be $.45 to $.49 per share, of which $1.9 million ($.19 per share) is related to the inventory write down and the loss on a filter order. Additionally, because the company no longer anticipates that fiscal 1997's operations will be profitable, the net loss also includes the reversal of a $600 thousand ($.06 per share) tax benefit recorded in the first quarter.

The inventory write-down at Trans-Tech, which amounted to $1.4 million, resulted from shifts in demand away from certain products and lower than anticipated sales volumes. The loss on the filter order, which was $500,000, occurred when a customer redesigned the end product. This redesign required us to scrap certain finished parts and materials and to issue credits for returned product that was no longer required by the customer.

Tom Leonard, President and CEO of Alpha, stated, "As we had indicated previously, Trans-Tech has been particularly hard hit by the current market softness, and we are taking the necessary actions to put it back on its feet. These actions will improve the match between Trans-Tech's capacity and its current and projected demand. We are also evaluating additional actions across the Company that will allow us to focus our energies and resources on our most strategic and promising product lines, thereby reducing costs and improving our focus on strategic markets.

Leonard further stated, "Alpha has the products and capabilities that we will need to thrive as the cellular and PCS markets expand. Orders received in the second quarter were up significantly over the first quarter, and our recent design wins are expected to lead to volume shipments and substantial new orders beginning in the third and fourth quarters.

"Despite the problems at Trans-Tech, there are positive signs there as well. We are recapturing market share, and we have achieved a major filter design win. Trans-Tech has received two new base station resonator orders, including a key, strategic order from a major OEM for a new material for next-generation GSM base stations.

"I am pleased at our progress at Alpha Microwave. Specifically, our MMIC orders for infrastructure base station products with Motorola, NorTel and Ericsson are expected to enter volume production in the next two quarters. Recent MMIC handset component design wins include the Motorola and Ericsson dual-band PCS and cellular phones, as well as new orders for ETACS and GSM. Our power amplifier line continues to expand, with volume production beginning in the third quarter, pending final qualification.

"In particular, our GaAs MMIC design wins in the quarter exceeded our expectations, thus requiring the rapid expansion of our wafer fab, as well as the addition of a third shift for the GaAs MMIC line in the next three to four months.

"We continue to see signs that the demand weakness and resulting sharp reduction of orders that hit the industry last winter is slowly improving, although it has not yet substantially increased Alpha's sales. We fully anticipate that Alpha will participate in the gradual strengthening of customer demand.

Safe Harbor Statement - Except for the historical information contained herein, this news release contains forward-looking statements that are inherently subject to risks and uncertainties. The Company's results could differ materially based on various factors, including without limitation: cancellation or deferral of customer orders, difficulties in the timely development and market acceptance of new products, market developments that vary from the current public expectations concerning the continued growth of wireless communications (including PCS), difficulties in manufacturing new or existing products in sufficient quantity or quality, increased competitive pressures, or economic conditions. Further information on factors that could affect the Company's financial results is included in the "Risk Factors" section of the Company's Prospectus dated November 21, 1995, and in the Company's periodic reports filed with the S.E.C., including the most recent Form 10-K and subsequent 10-Qs.

Alpha Industries designs and manufactures a broad range of monolithic integrated circuits, ceramic products, discrete semiconductors and subsystems for microwave, millimeter wave and radio frequency wireless communications applications. Alpha's products serve the needs of commercial manufacturers of cellular telephones, personal communications systems and networks (PCS/PCN), global positioning systems, mobile radio, and specialized wireless data services.

CONTACT: Alpha Industries Inc.

James C. Nemiah, 617/935-5150