VIENNA, Va., July 11 /PRNewswire-FirstCall/ -- The Allied Defense Group, Inc. (Amex: ADG) announces MECAR USA, its US subsidiary, has been awarded a Foreign Military Sales (FMS) contract with the US Army for more than $6M in small caliber ammunition destined for the armed forces of Afghanistan. Deliveries will begin this year and be completed in 2009.

Having now accumulated more than $46M in backlog so far this year, the ammunition services component of MECAR USA continues to evidence very strong growth. Its customer base is also well balanced in both geographical terms (Asia, Europe, and South America) and in customer identities (US Government and foreign direct sales MECAR USA continues to demonstrate very strong growth and is expected to continue in the coming quarters as well as into 2009 and beyond.

Major General (Ret) John Marcello, Chief Executive Officer of the Allied Defense Group stated, "Our new ammunition services sector continues to grow at a very noteworthy rate. Centered on MECAR USA, we have accumulated over $46 million in service-associated contracts so far this year and we feel confident the outlook for the remainder of the year is equally bright. This new FMS contract adds to an already historically high ADG backlog of over one quarter billion dollars.

"We are making meaningful progress in our quarter-over-quarter financial growth. ADG is not the Company it was one year ago. Since then we have diversified products and markets, reduced debt, bolstered liquidity, disposed of certain under-performing assets, and built new partnering and joint venture relationships. We continue to ramp up production in order to exploit ADG's extraordinarily large and growing backlog. Overhead cost reduction remains a management focus as we seek to drive profitability without impairing our demonstrated competitiveness.

"As an interesting growth benchmark, the potential revenues of MECAR USA's existing backlog now exceed the combined revenues of the subsidiaries we have recently divested.

"I want to reiterate that the fundamentals of our business are strong - as unequivocally demonstrated by recent solid growth to both our top and bottom lines. The Company remains well-positioned to grow and to continue to increase revenue and income in the coming years."

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. For more information, please visit the Company web site: www.allieddefensegroup.com.

Certain statements contained herein are "forward-looking" statements as such term is defined in the Private Securities Litigation Reform Act of 1995. Because statements include risks and uncertainties, actual results may differ materially from those expressed or implied and include, but are not limited to, those discussed in filings by the Company with the Securities and Exchange Commission.

For more information, please visit the Company web site: www.allieddefensegroup.com

For More Information, Contact:

Jim Drewitz, Investor Relations

830-669-2466

SOURCE Allied Defense Group, Inc.