SOURCE: Herley Industries, Inc.

June 13, 2006 15:15 ET

Three of Nine Herley Manufacturing Facilities Suspended by the U.S. Federal Government

LANCASTER, PA -- (MARKET WIRE) -- June 13, 2006 -- Herley Industries, Inc. (NASDAQ: HRLY) announced today that certain of its operations have been suspended from receiving new contract awards from the U.S. Government. The affected operations include facilities in Lancaster, Pennsylvania, Woburn, Massachusetts, Chicago, Illinois and Herley's subsidiary in Farmingdale, New York. The Chicago, Illinois location is a two-person marketing office. The result of this suspension is that these facilities will not be solicited for or awarded new contracts or contract extensions without special exceptions, pending the outcome of legal proceedings. The suspended facilities may receive contract awards or subcontracts from the Federal Government if the head of the agency states in writing the compelling reason to do so. A significant portion of Herley's business is received where the company is the only qualified supplier on critical defense programs. For this reason the effect of the suspension on these manufacturing facilities cannot easily be determined at this time. Currently, Herley has a funded backlog of approximately $142 million, which is not affected by this action, and which will be delivered to customers within the next year or two.

Herley facilities which are not included in the action and who are free to contract with the U.S. Government are our facilities in Whippany, NJ (Herley-CTI), Jerusalem (Herley-Israel), McLean, Virginia, (Innovative Concepts, Inc.), Ft. Walton Beach, Florida, (Micro Systems, Inc.), Farnborough, U.K. (EW Simulation Systems), and Melbourne, Florida, (Herley-RSS).

Herley Industries, Inc. is a leader in the design, development and manufacture of microwave technology solutions for the defense, aerospace and medical industries worldwide. Based in Lancaster, PA, Herley has nine locations and over a thousand employees worldwide. Additional information about the company can be found on the Internet at www.herley.com

Safe Harbor Statement -- Except for the historical information contained herein, this release may contain forward-looking statements. Such statements are inherently subject to risks and uncertainties. When used in this report, words such as "anticipated," "believes," "could," "estimates," "expects," "may," "plans," "potential" and "intends" and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such forward-looking statements are based on the belief of the Company's management, as well as assumptions made by and information currently available to the Company's management. The Company's results could differ materially based on various factors, including, but not limited to, cancellation or deferral of customer orders, difficulties in the timely development of new products, difficulties in manufacturing, increased competitive pressures, and general economic conditions. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

Contact Information

  • For information at Herley contact:
    Peg Guzzetti
    Investor Relations
    Tel: (717) 735-8117
    www.herley.com