Herley Subsidiary Receives $19M Development and Production Contract

(Lancaster, Pa., July 7, 2010) -- Herley Industries, Inc. (Nasdaq: HRLY) today announced that its Micro Systems, Inc. subsidiary in Fort Walton Beach, Florida has received a development and production contract with a potential value of $19 million from The Boeing Company, St. Louis, Mo. The contract includes an initial award of $2.3 million for the development of a command and control transponder and a ground systems module in support of the Boeing QF-16 Program. This development phase of the program is expected to result in a long term production program to supply hardware to be used in the conversion of older F-16 fighter jets to unmanned target drones. The initial development and production contract includes options for the first five production years of the program and brings the potential value of the contract to $19M. The QF-16 Program is expected to be in production for many years thereafter.

Wayne Armstrong, Micro Systems' President commented, "We are very pleased to have been selected by Boeing as a member of their QF-16 Program team. With our 20-year history of success on the preceding QF-4 Program, we offer a great deal of applicable experience and are committed to doing whatever it takes to make the program a success."

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