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Argon ST Receives $5.3 Million in OT-TES Communications Upgrade Awards for Additional Pre-Production Activities

FAIRFAX, Va.--(BUSINESS WIRE)--Jul. 9, 2009-- Argon ST, Inc. (NASDAQ:STST), a leading systems engineering, development and services company providing full-service C5ISR (command, control, communications, computers, combat systems, intelligence, surveillance and reconnaissance) systems and services to a wide range of defense and intelligence customers, today announced that it was awarded two contract modifications by the U.S. Army’s Program Executive Office for Simulation, Training & Instrumentation (PEO STRI) to support pre-production activities of the Operational Test-Tactical Engagement System (OT-TES) Communication Upgrade program. The contract modifications are valued at approximately $5.3 million.

Argon ST is the lead system integrator for the OT-TES Communication Upgrade, which represents the U.S. Army's core operational test instrumentation communication and engagement system modernization program. OT-TES Communication Upgrade (CU) evolves the Mobile Automated Instrumentation Suite (MAIS) fielded to the U.S. Army Operational Test Command (OTC) at Fort Hood, TX. OT-TES CU provides advanced laser-engagement and force-on-force networking using Argon ST’s innovative HyNetTM combining the best of hub-spoke & mobile ad-hoc networking for mobile user data collection, test/exercise coordination and combat simulation for Real Time Casualty Assessment (RTCA) during force-on-force engagements.

Argon, via an acquired entity, was initially awarded an Indefinite Delivery/Indefinite Quantity (ID/IQ) contract, now valued at over $250M, for the design, development, and delivery of the Communications Upgrade to the OT-TES in 2004. Argon ST is now completing integration and testing with recently deployed systems at Marine Corps Air Station Miramar, CA and Yuma Proving Grounds, AZ. The newly awarded efforts continue and extend Argon’s parallel efforts to prepare for full-rate production including logistics, training, and maintenance activities.

“OT-TES Communications Upgrade is a critical test and training range instrumentation project for the U.S. Army and an essential network communications program for Argon. It is a prime example of how our life cycle approach to programs is instrumental to our ongoing success,” commented Kerry Rowe, President and Chief Operating Officer, Argon ST. “We have taken this innovative idea, which began as a Small Business Innovative Research effort, through development and are now beginning the critical production readiness and lifecycle support activities. We are executing these efforts as a precursor to an expected start of full-rate production in fiscal year 2010. With continued execution and implementation we are optimistic that this program will stand out as a model for how Argon’s value proposition as an innovative, dependable and long term partner benefits our customers and our warfighters.”

About Argon ST, Inc.

Argon ST, Inc. designs, develops, and produces systems and sensors for the Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance, and Reconnaissance (C5ISR) markets including SIGINT (Signals Intelligence), ESM (Electronic Support Measures), EW (Electronic Warfare), IO (Information Operations), imaging, and acoustic systems serving domestic and international markets.

Forward-Looking Statements

Statements in this press release which are not historical facts are forward-looking statements under the provision of the Private Securities Litigation Reform Act of 1995. These statements may contain words such as “expects”, “could”, “believes”, “estimates”, “intends”, “may”, “envisions”, “targets” or other similar words. Forward-looking statements are not guarantees of future performance and are based upon numerous assumptions about future conditions that could prove not to be accurate. Forward-looking statements are subject to numerous risks and uncertainties, including without limitation the risks and uncertainties identified in the reports filed by the Company with the Securities and Exchange Commission (including the Company’s Form 10-K for the fiscal year ended September 30, 2008). Some of these specific risks, although not all, are: the availability of both commercial and governmental funding for the Company’s products and services; changes in the U.S. federal government procurement laws, regulations, and policies; the number, length and type of contracts and task orders awarded to the Company by its commercial and governmental customers; the availability of supply channels and materials; difficulties in developing and producing operationally advanced technology systems; the timing and customer acceptance of contract deliverables; the Company’s ability to attract and retain qualified personnel, including personnel with appropriate security clearances; charges from any future impairment reviews; the future impact of any acquisitions or divestitures the Company may make; the competitive environment for information technology products and services; general economic, business and political conditions nationally and internationally, including federal budgetary priorities; and other factors affecting the Company’s business that are beyond its control. All of the forward-looking statements should be considered in light of these factors. Investors should not put undue reliance on any forward-looking statements. We undertake no obligation to update these forward-looking statements to reflect new information, future events or otherwise.

Source: Argon ST, Inc.

Argon ST, Inc.
Investor Contact:
Aaron Daniels, 703-995-5610
ir@argonst.com
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Lori Hughes, 703-995-5610
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