VIENNA, Va., Dec. 13 /PRNewswire-FirstCall/ — The Allied Defense Group, Inc. (AMEX: ADG) today announced that its U.S.-based ammunition company, MECAR USA, has been awarded a $10.4 million order for the benefit of the United States military in support of Operation Iraqi Freedom.

The order calls for 39 million rounds of small caliber ammunition, which will be brokered by ADG. Deliveries are scheduled to occur in 2008.

Major General (Ret) John J. Marcello, The Allied Defense Group’s Chief Executive Officer and President, said, “To help smooth out some of the financial peaks and valleys in our Ammunition and Weapons Effects businesses, as well as to reduce reliance on the Company’s sales to its principal clients, we initiated a marketing campaign to target all countries with both the need and ability to purchase the Company’s products. That initiative has already yielded positive results and we expect to increase the customer base to more than 30 countries.

“Additionally, we have established business development activities at ADG headquarters in order to enter new markets in both the ammunition and electronic security sectors. It has taken some time, but that investment in business development is beginning to pay off, as this announcement demonstrates.”

Major General Marcello continued, “ADG will continue to supplement its manufacturing base by acquiring goods and services from other manufacturers in support of our customers’ requirements. In this manner we leverage our world- wide industry knowledge and experience, established market positions, business relationships, transportation and quality control systems, without bearing the burden of investing our own capital and other valuable resources.

“The Company continues to focus on improving its operational performance, and our backlog remains at a 45 month high. Efficient execution of this backlog has only just begun to be reflected in our financial performance, and will allow us to continue executing on our meaningful turnaround,” concluded Major General Marcello.

About The Allied Defense Group, Inc.
The Allied Defense Group, Inc. is a diversified international defense and security firm which: develops and produces conventional medium caliber ammunition marketed to defense departments worldwide; designs, produces and markets sophisticated microwave security systems; and manufactures battlefield effects simulators and other training devices for the military. For more Information, please visit the Company web site:

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