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Aeroflex Reports Second Quarter Fiscal 2014 Results

February 13, 2014

Aeroflex Holding Corp., a global provider of high performance microelectronic components, and test and measurement equipment, announced its financial results for the second quarter of fiscal 2014, which ended December 31, 2013.

In a release on February 7, the Company noted that as announced on September 5, 2013, Aeroflex sold the net assets of Aeroflex Test Equipment Services ("ATES"), a division of its U.K. subsidiary, Aeroflex Limited, for $18.4 million in cash. The results of operations of ATES are reported as income from discontinued operations. Aeroflex's prior period results have been adjusted to reflect this transaction.

Aeroflex's results from continuing operations for the second quarter of fiscal 2014:

-Net sales were $151.1 million compared to $151.9 million in the second quarter of fiscal 2013.

-Operating income was $9.5 million and income from continuing operations was $1.1 million, or $0.01 per share, compared to operating income of $5.1 million and income from continuing operations of $0.2 million, or $0.00 per share, in the second quarter of fiscal 2013.

-On a Non-GAAP basis, Adjusted EBITDA was $26.1 million compared to Adjusted EBITDA of $27.4 million in the second quarter of fiscal 2013. For the quarter, Non-GAAP operating income was $20.8 million compared to $22.5 million, and Non-GAAP net income was $9.2 million, or $0.11 per share, compared to of $8.7 million, or $0.10 per share, last year.

"This quarter we regained our momentum across many of our core growth markets," stated Len Borow, Chief Executive Officer of Aeroflex. "Led in particular by a strong showing in AMS, our book- to-bill was significantly above 1-to-1 as a company. Our ATS segment's book-to-bill was also above 1-to-1 for the quarter. AMS bookings were strong led by our two significant contract wins for mixed-signal semiconductors in new market adjacencies. Our ATS wireless infrastructure business continued to benefit from demand for next generation LTE technology in growing markets such as Asia, which resulted in a record bookings quarter for TM500s. Our strong bookings and market momentum are positioning us well to drive a very strong second half of fiscal 2014."

For the third quarter ending March 31, Aeroflex expects net sales to be between $155 million and $162 million, GAAP income from continuing operations to be between $4 million and $8 million, Adjusted EBITDA to be between $26 million and $30 million, GAAP income from continuing operations per share to be between $0.04 and $0.07 and Non-GAAP net income per share to be between $0.11 and $0.14.

The business outlook includes the results of Aeroflex's recently announced Shenick Network Systems ("Shenick") acquisition from the date of closing through March 31. Additionally, the Company anticipates the acquisition of Shenick will be neutral to Adjusted EBITDA in fiscal 2014 and accretive to Adjusted EBITDA in fiscal 2015. For the calendar year 2013, Shenick had net sales of $9.4 million.

The range of expected GAAP and Non-GAAP earnings per share for the fiscal third quarter was calculated using GAAP and Non-GAAP effective tax rates of 29 percent and 32 percent, respectively.

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