Merrimac Reports Second Quarter and Six Months 2007 Results

"We are seeing solid increases in core component business and, to an even greater extent, in our Multi-Mix(R) Microtechnology. The increase in Multi- Mix(R) business is a confirmation that we are advancing the market's need for integration of RF Microwave technology for our military and space markets. The growth we are seeing, in our opinion, is long term. Many of these new orders are the beginning of multi-year projects, which will bring follow on business for years to come, setting our "base level" higher. The projects include new Satellite systems, Electronic Systems for Advanced Navy Ships, and Electronic Countermeasures for Military Aircraft.

"Our R&D efforts, to enter into the commercial market with multilayer power amplifier technology, are progressing in parallel with our on-going success in establishing our integration technology for the military and space markets. As our efforts in this area come to fruition, we are confident that the broad base of applications and markets we envisioned for Multi-Mix(R) technology will be realized.

"The potential divestiture of Filtran will benefit Merrimac Industries, Inc. by allowing us to concentrate our resources on RF Microwave and Multi- Mix(R) Microtechnology product lines to generate sustainable, profitable growth."

    Mr. Carter continued, "Our financial highlights include:

    -- Record orders booked of $10.0 million for the second quarter and $16.5
       million for the first six months of 2007.
    -- Multi-Mix(R) represents about 20% of the total six months bookings ...
       a record.
    -- Highest quarter-end backlog ever of $17.2 million.
    -- Book-to-bill ratio of 1.41 to 1 for the first six months of 2007.
    -- Working capital of $9.9 million and current ratio of 3.6 to 1."

Investors are invited to participate in the financial results conference call on Tuesday, August 14, 2007 at 4:15 p.m. (Eastern) by dialing 1-800-311- 0799 (for International callers: 1-719-457-2695) ten minutes prior to the scheduled start time, and reference the Merrimac Industries second quarter 2007 conference call. For those unable to participate, a replay will be available for seven days by dialing 1-888-203-1112, or 1-719-457-0820 for international callers, passcode number 5074821.

This conference call will also be broadcast live over the internet by logging on to the web at this address:

If you are unable to participate during the live webcast, a link to the archived webcast will be listed on the Merrimac Industries, Inc. website .

About Merrimac

Merrimac Industries, Inc. is a leader in the design and manufacture of RF Microwave signal processing components, subsystem assemblies, and Multi-Mix(R) micro-multifunction modules (MMFM(R)), for the worldwide Defense, Satellite Communications (Satcom), Commercial Wireless and Homeland Security market segments. Merrimac is focused on providing Total Integrated Packaging Solutions(R) with Multi-Mix(R) Microtechnology, a leading edge competency providing value to our customers through miniaturization and integration. Multi-Mix(R) MMFM(R) provides a patented and novel packaging technology that employs a platform modular architecture strategy that incorporates embedded semiconductor devices, MMICs, etched resistors, passive circuit elements and plated-through via holes to form a three-dimensional integrated module applicable to High Power, High Frequency and High Performance mission-critical applications. Merrimac Industries facilities are registered under ISO 9001:2000, an internationally developed set of quality criteria for manufacturing operations.

Merrimac Industries, Inc. has facilities located in West Caldwell, NJ, San Jose, Costa Rica and Ottawa, Ontario, Canada, and has approximately 220 co-workers dedicated to the design and manufacture of signal processing components, gold plating of high-frequency microstrip, bonded stripline and thick metal-backed Teflon (PTFE) micro-circuitry and subsystems providing Total Integrated Packaging Solutions(R) for wireless applications. Merrimac (MRM) is listed on the American Stock Exchange. Multi-Mix(R), Multi-Mix PICO(R), MMFM(R) and Total Integrated Packaging Solutions(R) are trademarks of Merrimac Industries, Inc. For more information about Merrimac Industries, Inc. and its Canadian subsidiary Filtran Microcircuits Inc., please visit and

This press release contains statements relating to future results of the Company (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: risks associated with demand for and market acceptance of existing and newly developed products as to which the Company has made significant investments, particularly its Multi-Mix(R) products; the possibilities of impairment charges to the carrying value of our Multi-Mix(R) assets, thereby resulting in charges to our earnings; risks associated with adequate capacity to obtain raw materials and reduced control over delivery schedules and costs due to reliance on sole source or limited suppliers; slower than anticipated penetration into the satellite communications, defense and wireless markets; failure of our Original Equipment Manufacturer or OEM customers to successfully incorporate our products into their systems; changes in product mix resulting in unexpected engineering and research and development costs; delays and increased costs in product development, engineering and production; reliance on a small number of significant customers; the emergence of new or stronger competitors as a result of consolidation movements in the market; the timing and market acceptance of our or our OEM customers' new or enhanced products; general economic and industry conditions; the risk that the benefits expected from the Company's acquisition of Filtran Microcircuits Inc. are not realized; the ability to protect proprietary information and technology; competitive products and pricing pressures; our ability and the ability of our OEM customers to keep pace with the rapid technological changes and short product life cycles in our industry and gain market acceptance for new products and technologies; foreign currency fluctuations between the U.S. and Canadian dollars; risks relating to governmental regulatory actions in communications and defense programs; and inventory risks due to technological innovation and product obsolescence, as well as other risks and uncertainties as are detailed from time to time in the Company's Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof, and the Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

                          Merrimac Industries, Inc.
               Summary of Consolidated Statements of Operations

                                                           Quarter Ended
                                                    June 30,       July 1,
                                                     2007           2006

    Net sales                                     $6,225,000     $8,251,000
    Gross profit                                   2,382,000      3,710,000
    Selling, general and administrative expenses    2,284,000            2,645,000
        Research  and  development                                                  360,000                516,000
        Goodwill  impairment  charge                                          2,630,000                            -
        Operating  income  (loss)                                              (2,892,000)              549,000
        Interest  and  other  expense,    net                                  (71,000)              (33,000)
        Income  (loss)  before  income  taxes                          (2,963,000)              516,000
        Provision  (benefit)  for  income  taxes                          506,000                (13,000)
        Net  income  (loss)                                                          (3,469,000)              529,000

        Net  income  (loss)  per  common  share-basic  and
          diluted                                                                                    $(1.19)                    $.17

        Weighted  average  number  of  shares  outstanding  -
          basic                                                                                  2,911,000            3,144,000
        Weighted  average  number  of  shares  outstanding  -
          diluted                                                                              2,911,000            3,183,000

                                                                                                              Six  Months  Ended
                                                                                                        June  30,                July  1,
                                                                                                          2007                        2006

        Net  sales                                                                        $11,649,000        $14,482,000
        Gross  profit                                                                      4,164,000            6,112,000
        Selling,  general  and  administrative  expenses      4,775,000            5,131,000
        Research  and  development                                                  872,000                888,000
        Goodwill  impairment  charge                                          2,630,000                            -
        Operating  income  (loss)                                              (4,113,000)                93,000
        Interest  and  other  expense,  net                                  (114,000)              (52,000)
        Income  (loss)  before  income  taxes                          (4,227,000)                41,000
        Provision  (benefit)  for  income  taxes                          506,000                (48,000)
        Net  income  (loss)                                                          (4,733,000)                89,000

        Net  income  (loss)  per  common  share-basic
          and  diluted                                                                            $(1.58)                    $.03

        Weighted  average  number  of  shares
          outstanding  -  basic                                                      3,004,000            3,146,000
        Weighted  average  number  of  shares
          outstanding  -  diluted                                                  3,004,000            3,166,000

                                                    Merrimac  Industries,  Inc.
                                        Condensed  Consolidated  Balance  Sheets

                                                                                                      June  30,            December  30,
                                                                                                          2007                        2006
                                                                                                    (Unaudited)        (Unaudited)

        Current  assets:
            Cash  and  cash  equivalents                                      $2,817,000          $5,961,000
            Accounts  receivable,  net                                          5,230,000            5,852,000
            Income  tax  refunds  receivable                                    103,000                  99,000
            Inventories                                                                    4,784,000            3,917,000
            Other  current  assets                                                      727,000                882,000
            Deferred  tax  assets                                                                    -                  10,000
        Total  current  assets                                                    13,661,000          16,721,000
        Property,  plant  and  equipment,  net                        12,738,000          12,985,000
        Other  assets                                                                          538,000                493,000
        Deferred  tax  assets                                                            100,000                552,000
        Goodwill                                                                              1,063,000            3,503,000

        Total  Assets                                                                $  28,100,000      $  34,254,000

            Current  portion  of  long-term  debt                          $621,000              $649,000
            Deferred  tax  liabilities                                              100,000                100,000
            Other  current  liabilities                                        3,066,000            2,618,000
        Total  current  liabilities                                            3,787,000            3,367,000
        Long-term  debt,  net  of  current  portion                  4,277,000            4,564,000
        Deferred  liabilities                                                            50,000                  38,000
        Total  liabilities                                                            8,114,000            7,969,000
        Stockholders'  equity
            Common  stock                                                                        33,000                  33,000
            Additional  paid-in  capital                                    19,450,000          19,237,000
            Retained  earnings                                                        1,867,000            6,600,000
            Accumulated  other  comprehensive  income              1,758,000            1,389,000
            Treasury  stock                                                            (3,122,000)            (974,000)
        Stockholders'  equity                                                    19,986,000          26,285,000
        Total  Liabilities  and
          Stockholders'  Equity                                              $  28,100,000      $  34,254,000

                                                        Merrimac  Industries,  Inc.
                                  Condensed  Consolidated  Statements  of  Cash  Flows

                                                                                                              Six  Months  Ended

                                                                                                        June  30,                July  1,
                                                                                                            2007                        2006

        Cash  flows  from  operating  activities:
              Net  income  (loss)                                                  $  (4,733,000)            $89,000
              Adjustments  to  reconcile  net  income
                (loss)  to  net  cash  provided  by
                operating  activities:
                  Depreciation  and  amortization                            1,292,000          1,318,000
                  Amortization  of  deferred  financing  costs            15,000                25,000
                  Goodwill  impairment  charge                                  2,630,000                          -
                  Deferred  income  taxes                                                506,000                          -
                  Share-based  compensation                                          132,000                82,000
                  Changes  in  operating  assets  and  liabilities:
                      Accounts  receivable                                                686,000            (174,000)
                      Inventories                                                              (846,000)          (287,000)
                      Other  current  assets                                              166,000                62,000
                      Other  assets                                                              (62,000)            (21,000)
                      Other  current  liabilities                                    379,000            (736,000)
                      Deferred  liabilities                                                12,000                  8,000
        Net  cash  provided  by  operating  activities                  177,000              366,000
        Cash  flows  from  investing  activities:
              Purchases  of  capital  assets                                      (927,000)          (979,000)
        Net  cash  used  in  investing  activities                        (927,000)          (979,000)
        Cash  flows  from  financing  activities:
              Borrowings  under  revolving  lease  line                                -              160,000
              Repurchase  of  stock  for  the  treasury                (2,148,000)                        -
              Repayment  of  borrowings                                              (343,000)          (464,000)
              Proceeds  from  stock  sales                                              81,000              186,000
        Net  cash  used  in  financing  activities                    (2,410,000)          (118,000)
        Effect  of  exchange  rate  changes                                        16,000                33,000
        Net  decrease  in  cash  and  cash  equivalents            (3,144,000)          (698,000)
        Cash  and  cash  equivalents  at
          beginning  of  year                                                            5,961,000          4,081,000
        Cash  and  cash  equivalents  at  end  of  period        $  2,817,000      $  3,383,000

        Contact:    Mason  N.  Carter,  Chairman  &  CEO
                            973-575-1300,  ext.  1202
  Email  Contact  

Web site:

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