Applied Signal Technology, Inc. Signs More Production Orders in Support of the Big Safari Program.

Business/High-Tech Editors

SUNNYVALE, Calif.--(BUSINESS WIRE)--April 6, 2000

Applied Signal Technology, Inc. (NASDAQ - APSG) announced today that it has been awarded another production contract from Raytheon for $689,700 for continued support of the Air Force's Big Safari Program. The new contract provides for an additional thirteen (13) Model 255AE equalizer/demodulator products to be delivered to Raytheon over the next 13 months. The Company is currently under contract and has begun delivery of twenty-five (25) M255AE products to Raytheon in support of the Big Safari Program.

Gary Yancey, Applied Signal Technology's President and Chief Executive Officer commented, "This production order represents a value-added type of contract. By that I mean one in which we have less labor content than we would have in a development contract. In the current extremely tight labor market, it is very important for us to obtain these production type contracts in order to meet our growth goals.

Mr. Yancey further commented, "We are pursuing additional opportunities on the Big Safari Program as well as other airborne programs. To the extent we are successful in obtaining additional orders in these marketplaces, we have a better opportunity to meet our projected 15 - 20% year-over-year revenue growth. As we are able to book more production contracts and get the mix of development and production revenue closer to 50/50 we can also better meet our long term business model of 7% net income.

Applied Signal Technology designs, develops, manufactures and markets advanced digital signal processing equipment to process a wide range of telecommunications signals for commercial and government applications. For additional Company-related information, visit the Company's website located 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 including customer concentration, competition, dependence upon personnel, volatility of operating results, use of estimates in program costs-to-complete, and other risks detailed form time to time in the Company's SEC reports including its latest Form 10-K filed for the fiscal year ended October 31, 1999.