Axsys Technologies Announces Revised Fiscal 2005 Guidance.

ROCKY HILL, Conn. -- Axsys Technologies, Inc. (NASDAQ: AXYS), a global leader in the design, manufacture and distribution of precision optical solutions, today announced a revision to its annual financial guidance. This revision is largely due to the acquisition of Diversified Optical Products (DiOP) on May 2, 2005, a leading supplier of infrared surveillance camera solutions to military and homeland security customers, and a leading OEM supplier of military-grade thermal targeting and imaging lenses. As the DiOP acquisition closed on May 2, 2005, the updated guidance includes DiOP's projected financial results for the remaining eight months of 2005.

New Fiscal 2005 Guidance - versus prior fiscal 2005 guidance:

--Revenue guidance revised upward by 15% to $131.0 million from $114.0 million

--Operating income guidance revised upward by 24% to $13.6 million from $11.0 million

Revised operating income guidance for 2005 includes $700,000 of amortization expense related to intangible assets acquired. The amortization lives of these intangible assets range from one to eighteen years. Of the $700,000 in amortization expense, approximately $267,000 is associated with amortization of intangibles with lives of one year. In addition, operating income guidance for 2005 includes additional non-recurring costs of $423,000 as a result of recording the acquired inventory at fair market value.

Incremental interest expense resulting from the acquisition is expected to be $2.5 million during 2005.

Stephen W. Bershad, Chairman and CEO of Axsys Technologies said, "The integration process has progressed smoothly and the products are performing well. It is clear that this combination has established Axsys as a significant player in the thermal imaging surveillance industry. We look forward to participating in the growth opportunities resulting from our enhanced position in this fast-growing market."

Acquisition Highlights:

--The acquisition of DiOP dramatically enhances Axsys' position as a leading supplier of vertically integrated infrared surveillance systems.

--The acquisition of DiOP is a significant step in Axsys' strategy to leverage its optical and motion control capabilities to address the fast growing homeland security market.

--The combination of Axsys' existing motion control business and DiOP's camera business will enable the combined company to address new markets including aerial and shipboard surveillance that neither company could have addressed independently.

--The technical sophistication of DiOP's solutions directly supports Axsys' strategy to increase the value-added content of its product offerings.

--The integration of DiOP's infrared lens design and manufacturing capabilities with Axsys' existing infrared systems business will enable the combined business to satisfy the demand for military grade thermal lenses better than either one could have independently.

About Axsys

Axsys Technologies, Inc. is a vertically-integrated OEM supplier of precision optical solutions for high technology applications, serving the aerospace, defense and high performance commercial markets. For more information, visit www.axsys.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as "expect," "anticipate," "plan," "may," "will," "estimate" or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Important factors, which could cause actual results to differ materially, are described in Axsys' reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission, including without limitation: changes in the U.S. federal government spending priorities; the Company's ability to compete in the industries in which it operates, including the introduction of competing products or technologies by other companies and/or pricing pressures from competitors and/or customers; the potential for the Company's backlog to be reduced or cancelled; the Company's ability to implement its acquisition strategy and integrate its acquired companies successfully, including the recent acquisition of Diversified Optical Products; the Company's ability to manage costs under the Company's fixed-price contracts effectively; and changes in general economic and business conditions. These statements reflect the Company's current beliefs and are based upon information currently available to Axsys. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time, and we specifically disclaim any obligation to update these statements. For more information concerning the foregoing risks and uncertainties, see the Securities and Exchange Commission filings for Axsys.