News Release

Merrimac Nine-Month Sales Exceed Last Full-Year Sales; Quarterly Sales and Earnings Increase with Backlog Growing

WEST CALDWELL, NJ (October 28, 1997) - Merrimac Industries, Inc. (Amex: MRM) announces results for the third quarter and the first nine months of 1997, reflecting increases in earnings on record nine-month sales volume with its backlog continuing to grow.

Third quarter 1997 fully diluted net income per share was $.21 per share compared to the third quarter net loss of $.73 per share after the restructuring charge in the prior year. Third quarter sales of $4,984,000 increased $1,986,000 or 66% over the third quarter sales of the prior year of $2,998,000. Net income of $350,000 for the third quarter of 1997 compares to the net loss of $1,139,000 after the restructuring charge in 1996.

For the first nine months of 1997, fully diluted net income per share increased to $.60 per share compared to the $.36 per share loss in the prior year. Nine-month sales of $14,245,000 increased $4,134,000 or 41% over the prior year nine-month sales of $10,111,000. Net income for the first nine months of 1997 was $1,006,000 compared to the net loss of $574,000 after the restructuring charge reported in 1996. The fully diluted weighted average number of common shares outstanding for the first nine months of 1997 increased by 71,000 compared to that of the prior year. This increase was due mainly to the "in-the-money" value of Company-issued stock options, which resulted from higher Company stock prices during the quarter, and contributed to the inclusion of an additional 108,000 common equivalent shares produced from the assumed conversion of the stock options. Common stock repurchases during 1996 partially offset this increase. The increase in the number of weighted shares outstanding at the end of the third quarter impacted nine-month primary net income per share of $.63 by $.03 per share, causing fully diluted net income per share of $.60 to be reported.

Comparison of the $10.1 million backlog at the end of the third quarter of 1997 to that of the third quarter of the prior year of $6.8 million reflects a 48% increase in backlog, and is 23% above year-end 1996. Orders are expected to continue to be strong for Merrimac products in the fourth quarter.

Chairman and CEO Mason N. Carter commented: "Our Team has achieved a sales milestone by exceeding the last full year’s sales by almost $100,000 within this year’s first nine months. Our co-workers are meeting the demanding challenge of achieving record sales levels while implementing infrastructure changes. This extraordinary effort is part of our ongoing commitment to put our customers first. We are pleased with the third quarter booking level, which outpaced sales, thus overcoming the traditional softness during this time of year."

Merrimac Industries has recently entered into a $7 million revolving credit and term loan agreement with Summit Bank of Hackensack, NJ Up to $2.5 million of borrowings may be used for capital expenditures under the term loan. The full line of credit facility is available for working capital and general corporate purposes.

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 160 employees in the design and manufacture of high-performance components and subsystems for communications, defense and aerospace applications. 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