Herley Industries, Inc. Awarded a $6.5 Million Contract

U.S. Army Aviation awarded Innovative Concepts, a wholly owned subsidiary of Herley Industries, Inc. (Nasdaq: HRLY), a contract with a total award value of approximately $6.5 million. The contract is for the development of the next generation of the Improved Data Modem (IDM) Army Operational Flight Program Software Version 9.0. Army Aviation uses IDM V303(TM)/IDM V304(TM) to provide digital connectivity among airborne and ground platforms using existing radios and crypto equipment.

Version 9.0 includes the following enhancements that will improve Army Aviation net centric capabilities:

- Open System Architecture supporting multiple radio adapters easing the transition to JTRS functionality in the future

- Multiple message blocking support for various formats and sizes allowing backward capability regarding message handling

- Enhanced capability supporting multiple operational environments creating a flexible off the shelf system in order to support all Army Aviation platforms

-.Twenty-six feature improvements and/or new functionality meeting specific communication requirements of the U.S. Army

"Our consistent support and dedication in providing reliable network connectivity to Army Aviation continues with the award of this contract," said John Epperly, Innovative Concepts' General Manager. "We are a proven contributor of tactical data communications and are pleased to continue to do so for Army Aviation into the future."

John M. Kelley, President of Herley Industries, Inc., commented, "This is an important contract award for Innovative Concepts and for Herley. ICI has supported the Army Aviation with IDM technology for a number of years, and this significant award is a demonstration of their continued confidence in the Company."

The IDM is a lightweight, six-channel tactical modem/router that provides the critical data link required between ground and Army Aviation units. It provides the vital air-to-air transmission of target data between IDM-equipped attack aircraft. These types of communications allow the flight leader to assign individual targets to members as well as to collect and assess battle damage reports.

The U.S. Army has designated IDM Technology(R) for installation on every helicopter its inventory, including the Apache Longbow, Kiowa Warrior, Chinook, Blackhawk, and the new Armed Reconnaissance Helicopter (ARH). IDM Technology(R) has been successfully deployed in every major U.S. engagement since its development. The IDM is also on several foreign platforms worldwide providing interoperability with coalition forces.

Innovative Concepts, a wholly owned subsidiary of Herley Industries, Inc. (Nasdaq: HRLY), specializes in the research, design, development, production and support of wireless data communications products and services for the defense and intelligence communities. Our expertise includes the IDM Technology(R) product line, OpenMesh(TM) ad hoc networking solution, and expert engineering services. For more information: http://www.innocon.com.

Media Contact at Innovative ConceptsMelissa McCarthy, VP, Business Development, +1.703.245.2133, melissa.mccarthy@innocon.com

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 eight manufacturing locations and more than 1000 employees. Additional information about the company can be found on the Internet at http://www.herley.com

For information at Herley contact: Tel: (717) 735-8117

Peg Guzzetti http://www.herley.com

Investor Relations

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, the effects of the recently announced indictment of the Company and general economic conditions. The Company undertakes no obligation to update forward-looking statements as a result of future events or developments.

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