Merrimac Enters Stock Purchase Agreement with Filtran Microcircuits Inc.

WEST CALDWELL, NJ (December 16, 1998) - Merrimac Industries, Inc. (AMEX: MRM), WEST CALDWELL, NJ, announces that it has entered into a stock purchase agreement to acquire Filtran Microcircuits Inc. ("Filtran") of Ottawa, Ontario, Canada, a leading manufacturer of microwave micro circuitry. The cost of the acquisition to Merrimac should be approximately $4.7 million. The transaction is subject to satisfactory completion of due diligence by Merrimac, customary conditions and is anticipated to be completed in January 1999.

Chairman and CEO Mason N. Carter commented: "A leading source for the manufacture of micro circuitry, Filtran is a strategic fit for our 'Goal of Profitable Growth'. Their core competency is providing precise solutions to fine line micro circuitry applications. Filtran's performance is clearly recognized as best in class.

"Filtran has significant growth prospects within its served market segments and well-established key account customer base. Merrimac will benefit from applying their expertise in many of our focused market segments and product developments including high frequency applications and our proprietary Multi-Mix(TM) Microtechnology.

"Multi-Mix(TM) Microtechnology allows Merrimac and its customers to configure a modular approach to sub-assembly design. The development of our On-Line Co-Design(TM) Internet Design System will permit greater added value to key accounts and strengthen the working relationships with microwave designers. Filtran can play an integral role in this design concept with certain advanced processing technologies. Filtran will allow Merrimac to offer an extended product line into higher frequencies with its 1 mil +/- 0.2 mils capability. Filtran is an industry leader in gold plating of high frequency circuitry. This gold-plated, wire-bondable circuitry will be necessary for future circuit structures."

Filtran produces microstrip, bonded stripline and thick metal-backed Teflon (PTFE) circuits for satellite, aerospace, telecommunications, automotive, navigation and defense applications worldwide. They are an innovative, technically strong group, which includes some of the most creative scientists in the microwave circuit industry. Serving its diverse clientele since 1983, Filtran has earned a reputation for producing technically intricate circuits and superior quality workmanship.

In mission-critical applications like aerospace, air traffic control and search and rescue, microwave circuitry must be reliable. Filtran delivers the precision and performance that is required. Their stringent program of in-process controls results in high yields on the most complex circuits.

Mr. Carter went on to state: "Filtran will continue to operate independently led by CEO Craig Sutton and President Dr. K. Ramachandran." Mr. Sutton then commented: "Filtran's advanced circuit technologies complement Merrimac's RF and microwave expertise. I am especially excited to participate in the development and growth of their Multi-Mix(TM) Microtechnology. I see plenty of benefit to our mutual customers - not only in the capabilities offered, but also in the ease of use of the On-line CO-Design(TM) approach. Filtran is well positioned to offer expertise in the design for manufacture, fabrication and assembly of microwave components. Working together, our two companies are definitely stronger."

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 co-workers in the design and manufacture of signal processing components, micro-multifunction modules (MMFM(TM)) and subsystems providing Total Integrated Packaging Solutions for high-performance, mission-critical applications in 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