Applied Signal Technology, Inc. Declares Dividend for Shareholders and Announces Common Stock Repurchase Program.

SUNNYVALE, Calif.--(BUSINESS WIRE)--June 10, 1999--

Applied Signal Technology, Inc. (Nasdaq:APSG) announced that on June 9, 1999, the Company's Board of Directors has declared a $0.25 per share dividend payable to shareholders over the next 12 months.

The dividend is payable quarterly at the rate of $0.0625 per share. Payments will be made to shareholders of record at July 30, 1999, October 31, 1999, January 28, 2000 and April 28, 2000.

In addition, the Company's Board of Directors has authorized the Company to repurchase from time to time at management's discretion up to 250,000 shares of its own common stock. Purchases shall be made on the open market or in privately negotiated transactions during the next 12 month period ending June 8, 2000 at prevailing market prices. As of April 30, 1999, the Company had approximately 8,413,000 shares of common stock outstanding.

Purchases will be made using the Company's own cash resources. Shares repurchased will be retired and are intended to offset future issuances under the Company's current or future employee benefit plans or for other corporate purposes.

Regarding the dividend and common stock repurchase program, Gary Yancey, president and CEO, commented, "The board voted these two items in an effort to improve shareholder value. It is our feeling that for the financial strength of Applied Signal Technology, including the strong cash balances, the public market is undervaluing the stock. These are two initiatives within our control that will provide direct shareholder value in the case of the dividend payment and possible additional value through the common stock repurchase program. Therefore, we voted to use a small portion of our cash reserves for these two initiatives."

Applied Signal Technology designs, develops, manufactures and markets advanced digital signal processing equipment to collect and process a wide range of telecommunications signals for signal reconnaissance and industrial applications. For additional Company-related information, visit the Company's website at http://www.appsig.com.