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ATCA/Standard Servers

PT Warns on Earnings

ROCHESTER, N.Y. -- Performance Technologies, Inc. (NASDAQ: PTIX) today updated its guidance for the third quarter 2006. The books for the third quarter are not yet closed; however, current expectations are as follows:

Earnings for the third quarter, excluding restructuring charges, stock compensation expense and discrete income tax items are now expected to be in the range of $.00 to $.02 per diluted share, compared to initial guidance of $.06 to $.09 per diluted share.

As previously stated, revenue forecasts are supplemental information to the earnings guidance. Revenue for the third quarter 2006 is expected to be approximately $11.0 million, compared to initial expectations of $13.0 million to $14.0 million. The reduction in revenue is primarily attributable to: 1) lower shipments to one major customer with a business concentration in the U.S. wireless market, and 2) several signaling customers in North America and Europe that have delayed product deployments beyond the third quarter.

"Investments by U.S. wireless carriers in third generation mobile networks continued to be selective during the third quarter and this trend impacted the Company's revenue," said Michael P. Skarzynski, president and chief executive officer. "We continue to make excellent progress in our company-wide transformation program. We have completed the 'topgrading' of our sales team and are now implementing a process improvement program that will best serve the needs of our customers. We believe the Company's current product offering can support a much higher revenue base and we expect that our restructuring and transformation efforts will enhance the ability of the Company to achieve profitable revenue growth in 2007 and 2008. The Company has a strong balance sheet including cash and investments totaling approximately $35.0 million, or $2.60 per share and no long-term debt."

Performance Technologies Inc. (Nasdaq: PTIX)

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