AAI-Built Shadow^® Tactical Unmanned Aircraft Systems Surpass 100,000-hour Flight Milestone While Supporting U.S. Forces in Operation Iraqi Freedom

HUNT VALLEY, Maryland, June 20, 2006 —  United Industrial Corporation (NYSE: UIC) announced today that its AAI Corporation subsidiary has received an order from the U.S. Army for production of 266 additional One System remote video terminals (OSRVTs).

            In addition to calling for an added number of OSRVT production units this year, the fully funded $14.1 million contract provides the balance of funds for an initial 51 units ordered in 2006. Deliveries have begun and will continue through October 2007. As part of this order, AAI will provide 147 extended-range mobile directional antenna systems, spares, training, and contractor logistics support.

            The contract has options for an additional 779 OSRVT production units and 199 mobile directional antenna systems with a total potential contract value of more than $60 million.

            OSRVTs are small, mobile, intelligence-gathering systems capable of directly receiving and integrating live video and telemetry data from an array of manned and unmanned aircraft systems, including Shadow®, Predator®, I-GNAT®, Raven, Pioneer®, Hunter, and the Army’s new Extended Range/Multi-Purpose system.

            With OSRVT, soldiers are able to simultaneously receive live video and position data integrated on hand-held video terminals. A video “footprint” and icons identify aggressor units, vehicles, facilities, and natural landscape features that are overlaid on a geo-location map, enabling swift target identification, decision making, and response. Extended-range antennas allow OSRVT systems to meet mission range requirements with reception up to 80 kilometers.

            “Working closely with the Army and combat soldiers to determine warfighter requirements, we’ve developed a product that provides superior situational awareness and increased interoperability among multiple manned and unmanned platforms,” said Steven E. Reid, vice president of AAI’s unmanned aircraft systems division.

              “Through OSRVT, we’ve graduated unmanned aircraft systems from a role as observers to an advanced stage where their intelligence-gathering and delivery capabilities have a direct role in the fight — a weapon system component directly in the hands of soldiers,” Reid added. 

             AAI has been a global leader in tactical unmanned aircraft system intelligence-gathering technologies over the past three decades. The company’s Shadow system is the U.S. Army’s premier tactical unmanned aircraft system and is currently deployed in Operation Iraqi Freedom, Operation Enduring Freedom, and elsewhere.

            United Industrial Corporation designs, produces, and supports aerospace and defense systems through its wholly owned subsidiary, AAI Corporation, and AAI Corporation’s direct and indirect wholly owned subsidiaries, AAI Services Corporation, Aerosonde Pty Ltd, Aerosonde North America Incorporated, ESL Defence Limited, McTurbine Inc., and Symtx, Inc.  Its high-technology products and services include unmanned aircraft systems, training and simulation systems, automated aerospace test and maintenance equipment, armament systems, aviation ground support equipment, logistical and engineering services, and maintenance, repair and overhaul activities. 

             For more information, visit www.unitedindustrial.com and www.aaicorp.com. A product sheet with further details on the OSRVT program can be accessed here.

 Except for the historical information contained herein, information set forth in this news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and variations of such words and similar expressions that indicate future events and trends are intended to identify such forward-looking statements, which include, but are not limited to, projections of revenues, earnings, segment performance, cash flows, and contract awards. These forward-looking statements are subject to risks and uncertainties, which could cause the company’s actual results or performance to differ materially from those expressed or implied in such statements. The company makes no commitment to update any forward-looking statement or to disclose any facts, events, or circumstances after the date hereof that may affect the accuracy of any forward-looking statement. For additional information about the company and its various risk factors, please see the company’s most recent annual report on Form 10-K and other documents as filed with the Securities and Exchange Commission.   

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