AXSYS TECHNOLOGIES ANNOUNCES 106% INCREASE IN FOURTH QUARTER OPERATING INCOME AND ESTABLISHES 2005 GUIDANCE

ROCKY HILL, CT - February 9, 2005 - Axsys Technologies, Inc. (NASDAQ: AXYS), a global leader in t he design, manufacture and distribution of precision optical solutions, today announced financial results for the fourth quarter and fiscal year ended December 31, 2004.

Fourth Quarter Highlights - versus fiscal 2003 fourth quarter:

• Sales rose 28% to $28.0 million.
• Gross margin increased to 28.9% from 27.1%.
• Operating income was up 106% to $3.0 million; operating margin rose to 10.9% from 6.8%.
• Income from continuing operations grew to $3.6 million, or $0.49 per diluted share, from $1.5 million or $0. 20 per diluted share.
• A $620,000 income tax benefit was recognized in continuing operations in the quarter compared to income tax expense of $69,000 in the same quarter of 2003, largely due to the $1.4 million reversal of a previously record ed tax valuation allowance.
• Total backlog of firm orders at the close of 2004 was $88.2 million, up from $68.9 million at the end of 200 3.

Growth in the quarter included the results of the Company's most recent acquisition, Axsys Technologies IR Systems , formerly Telic Optics, Inc. Excluding this acquisition, revenues increased 18% in the fourth quarter.

A net loss from discontinued operations of $495,000, or $.06 per diluted share, was recognized during the quarter largely related to the write-off of the remaining real estate lease obligations of the Company's divested automati on businesses.

Segment Sales

Axsys has modified its segment reporting by combining what were previously referred to as the 'Aerospace and Defen se' and 'Commercial Products' groups into a new segment, 'Optical Systems.' This change reflects the increasing co llaboration among the Company's facilities in the development of products that serve both the aerospace and commer cial markets.

"The Axsys team has delivered another great quarter for our shareholders," said Stephen W. Bershad, Chairman and C hief Executive Officer of Axsys. "This performance is a direct result of our customers' growing reliance on Axsys to solve their most demanding optical and motion control challenges. Axsys has established a strong track record of revenue and earnings growth, and our large backlog positions us to continue this trend in the coming year."

Fiscal 2004 Results and Fiscal 2005 Guidance

For the fiscal year 2004, Axsys achieved sales of $103.5 million and operating income of $9.3 million. These resu lts represent a 22% increase in sales and 86% growth in operating income over 2003 results. In fiscal 2005, Axsys anticipates annual revenues of approximately $114.0 million and annual operating income of approximately $11.0 mi llion.

"Increasing demand for applications that require precision optical systems such as infrared imaging, surveillance and smart munitions, in conjunction with our proven ability to deliver quality solutions to our marquee customers, gives us confidence with regard to the coming fiscal year," continued Mr. Bershad. "We fully intend to capitaliz e on our unique technical capabilities and our growing presence in the markets we serve to deliver strong financia l results in 2005."

Conference Call

Management will conduct a conference call reviewing the financial results on Thursday, February 10, 2005 at 10:00 am ET. Interested parties may participate in the call by dialing 706-679-3148 - please call in 10 minutes before the call is scheduled to begin and ask for the Axsys Technologies call. The conference call will be broadcast liv e over the Internet via the Investors section of the Company's web site at www.axsys. com. To listen to the live call, please go to the web site at least 15 minutes early to register, download an d install any necessary audio software. If you are unable to listen live, the conference call will be archived on the Company's web site.

About Axsys

Axsys Technologies, Inc. is a vertically integrated OEM supplier of precision optical solutions for high technolog y applications, serving the aerospace, defense and high performance commercial markets. For more information, vis it www.axsys.com.

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchang e Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as "expe ct," "anticipate," "plan," "may," "will," "estimate" or other similar expressions. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materi ally. Important factors, which could cause actual results to differ materially, are described in Axsys' reports on Form 10-K and 10-Q on file with the Securities and Exchange Commission, including without limitation: the introdu ction of competing products or technologies by other companies and/or pricing pressures from competitors and/or cu stomers, a reversal or slowdown of the modest economic recovery presently being experienced in the United States, Axsys' inability to achieve synergies in connection with any acquisition, the incurrence of unexpected costs in co nnection with the acquisition and other contingencies and risks relating to the integration of Telic's operations and business. These statements reflect the Company's current beliefs and are based upon information currently ava ilable to Axsys. Be advised that developments subsequent to this release are likely to cause these statements to become outdated with the passage of time, and we specifically disclaim any obligation to update these statements. For more information concerning the foregoing risks and uncertainties, see the Securities and Exchange Commissio n filings for Axsys.