Ceradyne, Inc. Adds Manufacturing Facility; Production Capacity Increased 40% To Accommodate Projected Growth.

Business Editors

COSTA MESA, Calif.--(BUSINESS WIRE)--Dec. 18, 2001

Ceradyne, Inc. (Company) (Nasdaq:CRDN) today announced it has leased, with an option to purchase, a manufacturing facility in Irvine, Calif., to expand its production capacity by approximately 40% to accommodate projected growth in demand for its ceramic diesel engine components, ceramic orthodontic brackets, and ceramic armor.

Production of diesel engine components and orthodontic brackets will be moved from the Company's manufacturing site in Costa Mesa to the added facility in nearby Irvine, leaving the entire 86,000 square-foot Costa Mesa site dedicated to production of lightweight ceramic armor and other technical ceramics. The 40,000 square-foot production facility is expected to be fully operational by March 2002. Moving expenses and capital improvements are estimated not to exceed $500,000 and will be paid out of corporate funds.

Ceradyne President and CEO Joel Moskowitz commented: "The recently completed expansion of our Costa Mesa site enables us to meet all near-term armor production needs, but we are planning for significantly greater production requirements beginning in the first quarter of 2002. We expect continued expansion of the use of ceramic armor to protect military personnel on the ground and in air, sea and land vehicles. We also see attractive potential for using armor in new commercial applications currently under consideration and in development.

"The additional facility in Irvine will also allow higher production levels of diesel engine components and orthodontic brackets to meet steadily growing demand in those areas," continued Moskowitz. "Armor will be a major source of revenue growth in 2002, but diesel and orthodontic applications are also expected to contribute to revenue growth while providing important product diversification.

"Based on our assessment of the Company's product lines and overall business forecast, and despite ongoing uncertainty about the U.S. economy in general, we see the potential for generating substantial growth in top-line and bottom-line results in 2002," Moskowitz said.

Ceradyne develops, manufactures and markets advanced technical ceramics for industrial, electronic, defense and consumer applications. Additional information about the Company can be found at www.ceradyne.com.

This press release contains forward-looking statements regarding future events and the future performance of Ceradyne that involve risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties are described in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, as filed with the Securities and Exchange Commission.