News Release

Merrimac Second Quarter and Six Months 1998 Earnings Increase on Record Sales

WEST CALDWELL, NJ (August 6, 1998) - Merrimac Industries, Inc. (AMEX: MRM) announces results for the second quarter and six months of 1998 reflecting increases in earnings on record sales volume.

Second quarter 1998 sales of $5,574,000 increased 11.8% over the second quarter of the prior year of $4,986,000. Net income increased $31,000 or 8.2% to $409,000 for the second quarter of 1998 compared to 1997. Diluted net income per share was $.22, on a 7.8% increase in the number of weighted average diluted common shares outstanding, compared to the diluted per share amount of $.22 reported for the second quarter of the prior year.

For the first six months of 1998 sales of $11,366,000 increased 22.7% over prior year six-month sales of $9,261,000. Net income increased 27.4% to $836,000 compared to $656,000 reported in the first six months of 1997, and diluted net income per share increased to $.46, up 21.1% compared to diluted net income per share of $.38 reported in the first six months of the prior year.

The diluted weighted average number of common shares outstanding increased by 133,000 shares or 7.8% for the second quarter, and increased by 129,000 shares or 7.5% for the first six months, compared to the second quarter and first six months of the prior year. The increases resulted from common stock issued during the second half of 1997 from the exercise of stock options, common stock issued in 1998 from the exercise of stock options and sale of stock from the treasury, and the increase in dilutive securities arising from higher average stock prices during the second quarter and the first six months of 1998.

The Company entered the third quarter of 1998 with a backlog of $8.0 million, a decrease of $1.7 million or 18% from the same time last year. The majority of this differential is attributable to delays in certain new satellite constellation programs, satellite manufacturers working down inventories, and the timing of certain non-satellite business. This trend in orders is not expected to be long-term. It is anticipated that for the remainder of 1998 many of the satellite programs that have been delayed may translate into orders.

Chairman and CEO Mason N. Carter commented: "This was a strong performance for our Team with record sales and increased earnings. We continue to implement process change, strengthen our infrastructure and actively pursue new product and market opportunities. Technology reinvestment continues at a record pace more than doubling from last year. We are optimistic about the prospects for the future of our business. We formally announced the introduction of Multi-MixTM Microtechnology, a proprietary 3-dimensional microwave packaging technology, at an important industry trade show on June 10th. We have received favorable publicity and extremely positive customer response to the new technology.

"Multi-Mix® is a unique packaging technology that provides for the integration of a variety of different types of functionality, and it provides customers with what they want, which is a ‘total integrated packaging solution’. It is based on a platform strategy that provides predesigned modules that combine the benefits of standard and custom design. During this development process we have emphasized the need for technology innovation, process excellence and market focus. This successful effort provides us with an enabling technology that meets and exceeds customer requirements.

"Multi-Mix® coupled with a new and enhanced core products line should allow us to further penetrate the $18 billion RF Microwave market by opening up new segments of opportunity. There are many opportunities and challenges to optimize as we move towards our Goal of Profitable Growth."

About Merrimac

Merrimac Industries, Inc. is a leader in the design and manufacture of RF Microwave components, assemblies and Micro-Multifunction (MMFM®) Modules serving the wireless telecommunications industry worldwide with enabling technologies for commercial applications. Merrimac is focused on providing Total Integrated Packaging Solutions^TM with Multi-Mix Microtechnology®, a leading edge competency providing value to our customers through miniaturization and integration. The Multi-Mix® process for microwave, multilayer integrated MMFM® circuits is a patented method developed at Merrimac Industries based on fluoropolymer composite substrates. The fusion bonding of multilayer structures provides a homogeneous dielectric medium for superior electrical performance at microwave frequencies. The bonded layers may incorporate embedded semiconductor devices, MMICs, etched resistors, passive circuit elements and plated-through via holes to form a three-dimensional subsystem enclosure that requires no further packaging. Merrimac Industries, Inc. is ISO 9001 certified.

Merrimac Industries, Inc., with locations in West Caldwell, NJ and San Jose, Costa Rica, has approximately 170 co-workers in the design and manufacture of high-performance components for communications, defense and aerospace markets. Merrimac (MRM) is listed on the American Stock Exchange. For more information about Merrimac Industries, visit its home page at www.merrimacind.com.

This press release contains statements relating to future results of Merrimac (including certain projections and business trends) that are "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These risks and uncertainties include, but are not limited to: general economic and industry conditions; slower than anticipated penetration into the satellite communications, defense and wireless markets; the risk that the benefits expected from the acquisition of Filtran Microcircuits Inc. are not realized; the ability to protect proprietary information and technology; competitive products and pricing pressures; risks relating to governmental regulatory actions in communications and defense programs; and inventory risks due to technological innovation, as well as other risks and uncertainties, including but not limited to those detailed from time to time in Merrimac's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and Merrimac undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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Contacts

Mason N. Carter, Chairman and CEO,
Tel: 973.575.1300, Ext. 1202; Fax: 973.882.5989
E-mail: mnc@merrimacind.com