SIGNAL TEAMS WITH NORTHROP GRUMMAN.

Signal Technology Corporation (Nasdaq:STCO) has announced that its Defense Group has been selected by Northrop Grumman Systems Corporation as sole-source supplier of the next generation of Band 4 and 5 transmitters for the AN/ALQ-131 aircraft electronic countermeasures (ECM) system. The first production release is valued at more than $9 million. Follow-on production is valued at $80 million to $120 million over the next 10 years. Production will take place at the Company's Florida-based Keltec Division.

"The size and long-term nature of this agreement create a major revenue opportunity for the Company and position us to gain a substantial share of the market for radar warning receiver/ECM transmitters and power supplies over the next decade," said Signal Technology Chairman and Chief Executive Officer George Lombard. "Our ability to combine customer focus with superb technology and proven manufacturing skills continues to translate into new contract awards for Signal Technology's defense business."

"Our selection as developer of the next generation of Band 4 and 5 transmitters for this critical ECM system proves once again that working collaboratively with customers is the most effective way to design products that meet rigorous defense industry requirements," said John Cotumaccio, president and chief operating officer of Signal Technology's Defense Group. "By teaming with their counterparts at Northrop Grumman, Signal Technology's engineers were able to develop low-cost, low-risk design concepts that contribute to a military force that is better prepared to meet the electronic threats and harsh environmental conditions encountered by today's pilots and aircraft."

The AN/ALQ-131 jamming pod, manufactured by Northrop Grumman, protects military aircraft by altering the flight path of the enemy's incoming radar-directed weapons. One of the most extensively deployed ECM systems ever built, the AN/ALQ-131 is certified on numerous U.S. Air Force fighter and transport aircraft platforms, as well as those of several allied nations.

Signal Technology is a leader in developing state-of-the-art electronic components and systems for defense, space and commercial wireless communications applications. In its defense businesses, Signal Technology develops and manufactures RF and microwave products, power conversion products and power supplies for communications networks, electronic countermeasures, missiles, radar, intelligence and guidance systems for sale to defense prime contractors worldwide. The Company's commercial products include fixed broadband radios, switching/combining components and subsystems for PCS/cellular base stations, as well as semiconductor module solutions for wireless handsets and mobile appliances.

Signal has also been awarded four new orders totaling over $8.5 million to continue their work in support of the U.S. Army at Ft. Huachuca, Ariz., Ft. Detrick, Md., and Ft. Belvoir, Va. As a prime contractor for the U.S. Army Information Systems Engineering Command's (USAISEC) Total Engineering and Integration Service (TEIS) contract, SIGNAL has been providing engineering and technical support to the Technology Integration Center (TIC) and the MCA program since the inception of the contract. SIGNAL will also be providing Information Systems Security Engineering and System Security Certification and Accreditation (C&A) of the Windows2000/Active Directory, Exchange 2000, and Enterprise Management proofs of concept currently underway for the Program Executive Office (PEO) Enterprise Information Systems (EIS).

"As the Army moves forward with its knowledge management and information technology modernization efforts, SIGNAL continues to play an integral role in the Army's transformation," said SIGNAL President & CEO Roger Mody.