AXSYS TECHNOLOGIES SECOND QUARTER SALES UP 28%
AND NET INCOME UP 47%

Quarter-End Backlog Increases 23% Over Prior Year Period

ROCKY HILL, CT - July 25, 2007 - Axsys Technologies, Inc. (NASDAQ:AXYS), a global leader in the design, manufacture and distribution of precision optical solutions, today announced financial results for the second quarter ended June 30, 2007.

Consolidated sales totaled $49.2 million in the quarter ended June 30, 2007, compared to $38.5 million in the second quarter of 2006, an increase of $10.7 million, or 28%. Operating income for the quarter was $6.5 million, up 57% from $4.1 million in the second quarter of 2006. In the second quarter of 2007, Axsys reported net income of $3.8 million, or $0.35 per diluted share, an increase of 47% compared to net income of $2.6 million, or $0.24 per diluted share in the quarter ended July 1, 2006.

Backlog increased to a record $142.1 million, representing a 23% increase compared to the end of the second quarter of 2006, and a 5% increase compared to the end of the first quarter of 2007.

"The second quarter was a tremendous success for Axsys," said Stephen W. Bershad, Chairman and CEO of Axsys Technologies. "Not only did we complete an important acquisition and lay the groundwork to sell our Distributed Products business, but we also delivered record results across the board. Our business has never been healthier."

Pro Forma Results (Non-GAAP)

On July 9, 2007, the company announced its intention to sell its Distributed Products Group, and expects to report the business as a discontinued operation as of the third quarter of 2007.

Excluding the Distributed Products Group, the results for the second quarter of 2007, and comparisons to the second quarter of 2006, are as follows:

• Sales increased 36% to a record $43.0 million.
• Operating income grew 62% to $6.0 million.
• Net income increased 51% to $3.5 million.
• Diluted earnings per share increased to $0.32 from $0.22.
• Backlog increased to a record $126.9 million, representing a 25% increase compared to the end of the second quarter of 2006, and a 5% increase during the quarter.

The company experienced strong demand for its products from a variety of end-use applications including ground vehicle weapons stations and surveillance platforms, airborne targeting and surveillance systems, military satellites, commercial infrared applications, and long-range, ground-based surveillance systems.

Cineflex Camera Systems, which was acquired in April 2007, generated revenues of approximately $2 million during the quarter. Mr. Bershad continued, "I am very pleased with the performance of our new gyrostabilized camera business. We have resolved the issues surrounding the transfer of export licenses that threatened to delay some second quarter shipments, and as a consequence revenues exceeded our expectations. Even more importantly, however, the bookings rate is outpacing plan. We continue to be excited by the prospects for this business."

Financial Reports

Conference Call

Management will conduct a conference call reviewing the financial results on Thursday, July 26, 2007 at 10:00 a.m. Eastern Time. Shareholders, institutional investors and equity research analysts are invited to participate in the call by dialing 1-866-277-1184 and entering conference passcode 33461363.

The conference call will be webcast live via the Investor Relations section of the Company's web site at www.axsys.com. A replay of the webcast will be available shortly after the conclusion of the call for a period of approximately 90 days.

About Axsys

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

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One can identify these forward-looking statements by the use of the words such as "expect," "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 materially. Important factors, which could cause actual results to differ materially, are described in Axsys' reports on Form 10-K and Form 10-Q on file with the Securities and Exchange Commission, including without limitation: changes in the U.S. federal government spending priorities; the Company's ability to compete in the industries in which it operates, including the introduction of competing products or technologies by other companies and/or pricing pressures from competitors and/or customers; the potential for the Company's backlog to be reduced or cancelled; the Company's ability to implement its acquisition strategy and integrate its acquired companies successfully, including the recent acquisition of Cineflex; the Company's ability to successfully complete the planned sale of the Distributed Products business, the Company's ability to manage costs under the Company's fixed-price contracts effectively; and changes in general economic and business conditions. These statements reflect the Company's current beliefs and are based upon information currently available 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.

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