Applied Signal Technology, Inc. Assessed at CMM Level 3

Sunnyvale, CA December 8, 2005 – Applied Signal Technology, Inc. (NASDAQ – APSG) announced today that it was recently appraised and rated at Maturity Level 3 of the Capability Maturity Model® for Software (CMM®) of the Software Engineering Institute (SEI). The announcement was made October 26, 2005 during the findings meeting at the company’s Sunnyvale, CA headquarters.

The appraisal was led by SEI-authorized assessor Roselyn Whitney of Process Focus Management, using the Standard CMMI® Appraisal Method for Process Improvement (SCAMPI SM), version 1.1. The scope of the appraisal included all software development, testing, and maintenance activities carried out. The appraisal evaluated 13 key process areas (KPAs) from maturity levels 2 and 3. The successful appraisal provides independent verification of APSG’s software process maturity as measured against an internationally accepted software industry standard.

APSG President and CEO Gary Yancey stated, “This is an extremely important milestone for our company. Having software development processes that meet these requirements is paramount to efficient and solid software development. Since software represents two-thirds of the engineering in most of our developments, this is key to good development program performance.”

SEI’s Software CMM is a model for increasing the maturity of the software processes of an organization through the implementation of defined key practices. The model has become the de facto standard for assessing and improving software development processes.

Applied Signal Technology, Inc. provides advanced digital signal processing products, systems, and services in support of intelligence, surveillance, and reconnaissance for global security. For further information about Applied Signal Technology’s products and services visit our website at www.appsig.com.