SYS Technologies and AP Labs Inc. Announce Letter of Intent to Merge Operations.

Business Editors

SAN DIEGO--(BUSINESS WIRE)--Dec. 19, 2002

Cliff Cooke, president and COO of SYS Technologies (OTCBB:SYYS), and Randall Finley, president and COO of AP Labs Inc., today announced that their respective companies have reached a preliminary agreement on terms that would result in a merger.

SYS Technologies and AP Labs Inc. have agreed to work on a final definitive agreement that would solidify specifics of the transaction with a proposed closing in March of 2003. The terms will be disclosed upon the completion of the agreement.

The two companies have different product and service strengths, which together are complimentary and supportive of the defense customer base they both serve. The combination of the two companies and their synergies is expected to benefit their employees, customers, suppliers and financial stakeholders.

"SYS Technologies has targeted three primary areas of growth: IT and Engineering Services, Technical Training and Embedded Systems. With the start up of our new Computer Training business earlier this year, the merger with AP Labs, Inc. completes the initial phase of our efforts to enter all of these related and critical DoD business areas. It is a significant step in our aggressive growth strategy and the combination will result in combined annual revenue of over $50M. The combined company can apply for a national stock exchange listing," said Cooke. "The transaction not only contributes directly to the SYS Technologies bottom line, but enhances our competitive position with new product offerings and added technological expertise. The marriage of SYS Technologies real time processing expertise with the best of breed data acquisition technology, the high end video signal-processing and the real time systems expertise of AP Labs, Inc. will permit the combined organization to economically satisfy more of our customers' critical needs."

"SYS Technologies has an outstanding reputation for providing engineered solutions to its customers. With AP Labs, Inc., we feel that we can package these solutions to a broader industry base," said Finley. "The combined company is poised for tremendous growth and I am excited to see our solid management and technical team merging with the SYS Technologies team. Our joint strategy of building around autonomous work teams permits us to continue to serve our customers without interruption while providing additional resources and opening new opportunities with joint efforts."

About AP Labs Inc.

AP Labs Inc. is the premier provider of COTS solutions and custom turnkey products, specializing in the design, development and manufacturing of rugged enclosures and integrated systems for high-end defense, aerospace and commercial markets. AP Labs Inc. provides a single point of contact for design, test and support of complex systems, whether it is complete systems containing scores of racks or a single enclosure. Supported by its Manufacturing Services Division, AP Labs Inc. also provides in-house precision sheet metal fabrication; wiring harnesses, circuit card and enclosure assemblies. Most of AP Labs Inc. customers are prime defense contractors and include Lockheed, Raytheon and Boeing. Over 25 percent of sales are direct to the DoD. For additional information, visit the AP Labs Inc. Web site at http://www.aplabs.com.

About SYS Technologies

SYS Technologies has provided engineering, technical, financial and management services to a myriad of commercial and U.S. government customers since 1966. It currently has several multiple-year management and engineering service contracts with the U.S. Navy and General Services Administration at various locations across the country. The company, which has seen steady growth in recent years, is publicly traded (OTCBB:SYYS). SYS Technologies is headquartered in San Diego at 9620 Chesapeake Drive, San Diego, California 92123, and has offices in Carlsbad and Oxnard, Calif., and Arlington and Chesapeake, Va. For additional information, visit the SYS Technologies Web site at http://www.systechnologies.com.

This press release includes "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact included in this press release regarding the Company's strategies, plans, objectives, expectations, and future operating results are forward-looking statements. Although SYS believes that the expectations reflected in such forward-looking statements are reasonable at this time, it can give no assurance that such expectations will prove to have been correct. Actual results could differ materially based upon a number of factors including, but not limited to, the state of economy, competition, unanticipated business opportunities, availability of financing, market acceptance, government regulation, dependence on key personnel, limited public market and liquidity, shares eligible for future sale, continuation and renewal of contracts and other risks that may apply to the Company including risks that are disclosed in the Company's Securities and Exchange Commission filings.