Cherokee to Close Manufacturing Plant in Mexico; Company Will Transfer Manufacturing to Its New Facility in China.

TUSTIN, Calif. -- Cherokee International Corporation (NASDAQ:CHRK), a leading provider of custom-designed power supplies, today announced that it plans to close its manufacturing operation in Guadalajara, Mexico by the first quarter of 2007 and move the products manufactured in that facility to a newly built facility in Shanghai, China.

The Guadalajara facility encompasses 35,000 square feet in one building and has been in operation since 1988, recently employing approximately 250 full time and temporary employees in the production of power supplies. The Company owns the building and has begun seeking a buyer for the property.

In February 2006, Cherokee International opened a new, 120,000 square foot, state-of-the-art manufacturing facility in Shanghai, China and plans to move and consolidate high volume, low mix manufacturing from plants that represent a higher cost basis to operate to this new facility as part of Cherokee's China strategy.

The design and location of Cherokee's new facility in Shanghai optimizes the Company's and its customers' supply chains as an increasing number of Cherokee's customers and suppliers have their own manufacturing operations in China. It also positions the Company to take advantage of the overall business growth in Asia.

Jeffrey M. Frank, Cherokee's Chief Executive Officer, stated, "The Company and I have a deep appreciation for the long and dedicated service of our employees in Guadalajara. However, changing business conditions require us to reduce material, delivery, labor and overhead expenses by ramping up work in our new China facility. This will improve gross margins, keep us competitive and return value to our many loyal customers and shareholders."

Cherokee expects annual recurring savings of approximately $1,700,000 to $2,200,000, plus the value of the facility once it is sold. Cherokee also expects restructuring costs of approximately $900,000 to $1,400,000 to be incurred over the third and fourth quarters.

About Cherokee International Corporation

Cherokee International Corporation designs and manufactures high reliability custom and standard power supplies for original equipment manufacturers. Our advanced power supply products are typically custom designed into higher-end applications in the computing and storage, wireless infrastructure, enterprise networking, medical and industrial markets.

Safe Harbor Statement

Certain statements contained in this press release are forward-looking statements. These forward-looking statements are based upon our current expectations about future events. When used in this press release, the words "believe," "anticipate," "intend," "estimate," "expect" and similar expressions, or the negative of such words and expressions, are intended to identify forward-looking statements, although not all forward-looking statements contain such words or expressions. These forward-looking statements generally relate to our plans, objectives and expectations for future operations. However, these statements are subject to a number of risks and uncertainties affecting our business. You should read this press release completely and with the understanding that actual future results may be materially different from what we expect as a result of these risks and uncertainties and other factors, which include, but are not limited to: (1) changes in general economic and business conditions, domestically and internationally, (2) reductions in sales to, or the loss of, any of the Company's significant customers or in customer capacity generally, (3) the Company's inability to realize expected cost savings by shifting production to its Shanghai facility, (4) changes in the Company's sales mix to lower margin products, (5) increased competition in the Company's industry, (6) disruptions of the Company's established supply channels, (7) the Company's level of debt and restrictions imposed by its debt agreements, and (8) the additional risk factors identified in the Company's filings with the Securities and Exchange Commission, including its annual report on Form 10-K. Except as required by law, the Company undertakes no obligation to update any forward-looking statements, even though the Company's situation may change in the future.