Axsys Signs $18.6 Million Contract for Production of Optical Components for the James Webb Space Telescope

Axsys
Technologies, Inc. , a fully integrated supplier of
precision optical assemblies and components used in a variety of high
performance commercial, aerospace and defense applications, announced
that it has received a $18.6 million definitive contract from Ball
Aerospace and Technology Corporation to produce beryllium optical
substrates for the James Webb Space Telescope (“JWST”). The contract
contains $9.9 million of production revenues and $8.7 million for
facilitization.

As previously announced in September of 2003, Axsys Technologies’
Precision Machined Products division, located in Cullman, Alabama, was
selected as part of the beryllium mirror team to produce a 6.5-meter
primary mirror to be used on the JWST. The primary mirror is comprised
of 18 individual lightweight beryllium segments. Northrop Grumman is
the prime contractor for JWST, which is due to launch in 2011, and
will replace the Hubble as NASA’s premier space telescope. Because of
the large size of the primary mirror, JWST will be significantly more
sensitive than ground-based infrared telescopes, enabling it to search
for the first stars and galaxies formed in the universe billions of
years ago.

Axsys’ contract includes the production of optical substrates for
an engineering development unit, 18 primary mirror segments and
support structures. We expect to complete the engineering development
unit in the first quarter of 2005, with delivery of all 18 segments by
the end of 2006.

Stephen W. Bershad, Chairman and CEO of Axsys Technologies, Inc.
commented: “This order is very significant to Axsys and demonstrates
our technical and market leadership in producing precision optical
products for demanding applications. Additionally, it provides Axsys
with an expanded knowledge base that we will be able to apply to new
programs for applications beyond 2006.”

C.R. “Bud” Jenkins, President of Axsys’ Aerospace and Defense
Group added: “We have been working with NASA, Ball Aerospace and the
other members of the beryllium mirror team for over five years to
prove the viability of beryllium on this program. We are excited about
our contribution to such an important program and look forward to the
successful launch and deployment of leading-edge technology.”

Axsys Technologies, Inc. is a fully integrated supplier of
precision optical assemblies and components used in a variety of high
performance commercial and aerospace/defense applications. For more
information, contact Axsys Technologies, Inc., at www.axsys.com.

This press release contains forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended. One can identify these forward-looking statements by the use
of the words such as “expect,” “anticipate,” “plan,” “may,” “will,”
“estimate” or other similar expressions. Because such statements apply
to future events, they are subject to risks and uncertainties that
could cause the actual results to differ materially. Important
factors, which could cause actual results to differ materially, are
described in Axsys’ reports on Form 10-K and 10-Q on file with the
Securities and Exchange Commission, including without limitation: the
introduction of competing products or technologies by other companies
and/or pricing pressures from competitors and/or customers or reversal
or slowdown of the modest economic recovery presently being
experienced in the United States.