BAE Systems Receives Thermal Weapon Sights Orders; Selected for Advanced Array Development.

LEXINGTON, Mass. -- BAE Systems has received two U.S. Army orders totaling $80 million for production of thermal weapon sights. The orders expedite production to meet Army fielding requirements and exercise remaining options under a five-year contract that calls for 29,000 of the day/night, all-weather sights.

The Army also awarded BAE Systems funding for advanced technology development that will continue to reduce the size, weight, and cost of future weapon sights.

The company received a $35 million contract modification to its Thermal Weapon Sight II (TWS II) contract to accelerate deliveries to meet Army requirements driven by the global war on terrorism. Separately, it received a $45 million order, also under the TWS II effort, to exercise all remaining base and option quantities on the five-year contract, originally awarded in March 2004.

The two awards bring the total value of the TWS II contract to $285 million. To date, the company has delivered more than 4,500 of the 29,000 weapon sights. The contract is managed by the Army's Program Executive Office-Soldier at Fort Belvoir, Virginia, and administered by the Army Communications-Electronics Command at Fort Monmouth, New Jersey.

"These weapon sights provide Army infantry with the ability to detect and engage targets day or night, in all weather and battlefield conditions," said Bruce Zukauskas, director of military programs for BAE Systems in Lexington, Massachusetts. "We are committed to accelerating production of this vitally important equipment in support of our troops."

The TWS II program produces sights for applications ranging from rifles to heavy, tripod-mounted weapons. The thermal technology enables individual and crew-served weapon gunners to see deep into the battlefield, increasing their surveillance and target acquisition range.

Separately, the Army selected BAE Systems to continue development of advanced microbolometer technology designed to reduce the size, weight, and cost of future weapon sights. Under an Army contract awarded early in 2006, the company has partnered with the Army to demonstrate 17-micron, 640x480 pixel focal plane arrays in medium and heavy thermal weapon sights. The arrays have an active area about one-third the size of existing arrays.

"Achieving performance comparable to the larger arrays is a significant technical breakthrough that promises major advances in thermal weapon sight technology," said Margaret Kohin, director of technology programs for BAE Systems in Lexington. "Our goal is to ensure that these sights are highly reliable on the battlefield and easy to use."

The size reduction is made possible by state-of-the-art process technology that recently came online at BAE Systems' Semiconductor Technology Center in Manassas, Virginia. The company, in partnership with the Department of Defense, recently completed a $150 million factory modernization, providing a new specialty production capability to manufacture precision microelectronics. The company's Manassas facility recently was designated a Category 1 microelectronics "trusted source" for mission-critical DoD microelectronics, and is approved for classified microelectronics design, test, and production.

With dual foundries operating in Lexington and Manassas, BAE Systems has increased its total microbolometer manufacturing capacity by more than a factor of four.

About BAE Systems

BAE Systems is the premier trans-Atlantic defense and aerospace company, delivering a full range of products and services for air, land, and naval forces, as well as advanced electronics, information technology solutions, and customer support services. BAE Systems, with 88,000 employees worldwide, had 2005 sales that exceeded $22 billion, excluding the group's former interest in Airbus.