Applied Signal Technology, Inc. Receives Over $18 Million in New Orders During May and June 2002.

Business Editors/High Tech Writers

Applied Signal Technology, Inc. (NASDAQ:APSG) announced today that it has received over $18 million in new orders during the months of May and June 2002. These orders are for a variety of signal intelligence products and services.

Mr. Gary Yancey, President and Chief Executive Officer commented, "Since the September 11th attack, the counter-terrorism campaign has been concentrating on the administration of the war and the replacement of expendables. Our assumption has been that the emphasis would shift towards proactive efforts to prevent such attacks in the future and that this would include emphasis on better intelligence gathering. The recent Congressional investigations of U.S. intelligence gathering processes and the emphasis that President Bush is placing on Homeland Security seem to be supporting this scenario."

Mr. Yancey went on to say, "We believe the major increase in orders for the first two months of this quarter are also a direct result of the emphasis on intelligence gathering. We are optimistic that there will be a continued increase in orders into the foreseeable future. Indeed, the U.S. Government cannot take the risk of reducing investments in intelligence gathering."

Mr. Yancey concluded his remarks, "I believe the spending trend by the U.S. Government will continue into the foreseeable future, which should bode well for Applied Signal Technology."

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

Except for historical information contained herein, matters discussed in this news release may contain forward-looking statements that involve risks and uncertainties. Statements as to the Company's belief about the future spending by the U.S. Government on signal intelligence and the current marketplace for the Company's products and services are forward-looking statements. The risks and uncertainties associated with these statements include whether orders will be issued by the U. S. Government and whether the Company will be successful in obtaining contracts for these orders if they are forthcoming; and other risks detailed from time to time in the Company's SEC reports including its latest Form 10-K filed for the fiscal year ended October 31, 2001.