Rancho Santa Margarita, CA -- January 22, 2004 - Palomar Products, Inc. announced today that they have been awarded a contract by The Boeing Company for the Mission Intercommunications Systems (ICS) for the 737 AEW&C Peace Eagle program.

The new ICS is a derivative of the system being delivered to Boeing for the Australian Defence Force 737 AEW&C Project Wedgetail. The Peace Eagle Program is for the Republic of Turkey. The program includes the acquisition and development of a new AEW&C system, which includes four 737 AEW&C aircraft and ground equipment. Delivery of the first aircraft is expected in 2007.

Palomar Products has been supplying secure Intercommunications systems to Boeing since the 1970s, when the Palomar organization was part of Hughes Aircraft Company. In anticipation of the increasing demand requiring sophisticated digital communications capabilities, Palomar Products has developed a state-of-the-art audio / data distribution system - using the latest digital signal processing and networking technology. Val Policky, Palomar Products' President, stated: "We are very pleased with this award. Palomar's forecasted production orders for this platform are significant in future years and it is gratifying to know that after three decades of being an award winning supplier to Boeing, that we will be able to continue in the decades ahead."

"Palomar's analog ICS, long recognized as an industry standard, complemented by our digital system allows me to offer customers throughout the world a fully compliant solution meeting their operational needs", states Bob Lawson, Marketing Director of Palomar Products, Inc.

Palomar Products, Inc. is a leading developer and manufacturer of secure audio and data distribution systems for military airborne and ground-based applications. Located in Rancho Santa Margarita, California, Palomar has provided TEMPEST qualified systems to customers throughout the world for over 30 years.

The Boeing Company is the world's largest manufacturer of satellites, commercial jetliners and military aircraft. In terms of sales, Boeing is the largest exporter in the United States. Total company revenues for 2002 were $54 billion.

Contact:
Palomar Products
Bob Lawson
Marketing Director
Voice (949) 766-5434
FAX (949) 766-5353
E-mail: rlawson@palpro.com