Raytheon Awarded $31 Million To Supply MK 46 Torpedoes.

LEXINGTON, Mass.--(BUSINESS WIRE)--March 31, 1998--The U.S. Naval Sea Systems Command has awarded Raytheon Systems Company, a unit of Raytheon Company (NYSE:RTNA)(NYSE:RTNB), a $31 million production contract to supply Mk 46 torpedoes to two international navies. The contract, issued under a foreign military sales (FMS) agreement, calls for 110 Mk 46 Mod 5 torpedoes and the upgrade of 20 Mk 46 Mod 2 torpedoes to the Mod 5 configuration.

Raytheon expects the U.S. Navy to exercise a further contract option to build an additional 72 Mk 46 Mod 5 torpedoes, increasing the total contract award to $49 million.

The FMS option designates the torpedoes for a third international navy, with deliveries projected for second quarter 1998. Final shipment of torpedoes under the initial contract will be completed during the second quarter 1998.

The Mk 46 torpedo is the only lightweight torpedo in the world that has been in continuous production since 1965. Launched from surface ships and aircraft, the high-speed Mk 46 is effective in both deep and shallow water. Raytheon's torpedo facility at Mukilteo, Wash., has produced more than 25,000 Mk 46 torpedoes for the U.S. and allied navies.

"Recent U.S. Navy decisions to transfer surplus ships to allied navies is having a very positive effect on our torpedo business," said Mike Garten, a director of international business at Raytheon Systems Company. "In addition to supplying weapon systems to U.S. platforms acquired by our allies, we are also expanding the Mk 46 shipboard launch capability to accommodate fleets that are retrofitting their own ships and air anti-submarine warfare (ASW) platforms. In the near future, international navies will be able to launch the Mk 46 from the MILAS shipboard torpedo launcher."

GIE MILAS, a joint venture company formed by MATRA BAe Dynamics France and Alenia Difesa of Italy, originally designed, developed, and built the MILAS system to launch the MU 90 Franco-Italian torpedo. GIE MILAS is pursuing the adaptation of the Mk 46 torpedo into the MILAS ASW Missile System in order to offer the MILAS system as a stand-off ASW weapon systems capability to the 24 navies that carry the MK 46 torpedo.

Raytheon signed a $1.7 million engineering development contract in October 1997 with GIE MILAS to support the integration of the Mk 46 torpedo into the MILAS Antisubmarine Warfare (ASW) Missile System. Development work, integration and launch qualification tests are expected to be completed by the year 2000.

Up to this point, the U.S. Navy's Anti-submarine Rocket (ASROC) and Vertical Launch ASROC (VLA) torpedo launch systems have been certified to carry and launch the Mk 46 Mod 5 torpedo. Both ASROC and VLA are limited to installation during ship construction or a major overhaul. In contrast, the MILAS launcher system is a cost-effective retrofit option for ships that require the installation of a shipboard torpedo launcher without a major overhaul.

"We will no be able to offer the Mk 46 for ASROC, VLA, and MILAS launchers, which will increase our international torpedo sales," said Garten.

Raytheon Company, headquartered based in Lexington, Mass., is a global technology leader, with worldwide sales of more than $20 billion and over 118,000 employees. The company provides state-of-the-art products and services in the areas of defense and commercial electronics, engineering and construction and business and special mission aircraft. Raytheon has operations throughout the United States and services customers in more than 80 countries around the world.

CONTACT: Raytheon Systems Company

Dave Shea, 703.284.4245

http://www.raytheon.com