Order Calls For Four Different Types Of 25 mm Ammunition Compliments Rapid Growth In Services Sector Buttressed by Stronger Balance Sheet

09:23 GMT, October 12, 2008 VIENNA, Va. | The Allied Defense Group, Inc. (Amex: ADG) is pleased to announce MECAR S.A., its Belgian defense unit, has received orders exceeding $8 million from a returning Middle Eastern customer for delivery of ammunition during 2009. The Company's funded backlog now exceeds $168million. The contract calls for the delivery of four different types of 25 mm ammunition. Mecar manufactures three of the four rounds while relying on a key subcontractor for the sourcing of the remaining 25mm round in the contract.

Major General (Ret) John J. Marcello, President and Chief Executive Officer of the Allied Defense Group, stated, "I am pleased to announce that MECAR has won this important contract, worth over $8 million from a returning client for a different suite of products.

"This new ammunition manufacturing contract from an old client compliments the rapid growth we are experiencing in the ammunition services sector. Traditionally, we have enjoyed a very loyal client base and it is worth noting that base continues to grow. In fact, 36 per cent of our current backlog is attributed to new clients.

"We remain particularly well-positioned in those areas of the international market less influenced by the current financial situation given our customer base and strategic relationships, defined market advantages and proprietary technologies.

"In addition, the recent sale of our GMS subsidiary, has allowed the Company to strengthen its balance sheet by providing approximately $21 million of cash available for extinguishing debt.

"The fundamentals of our Company are strong and getting stronger," General Marcello concluded. About The Allied Defense Group: The Allied Defense Group, Inc. is a diversified international defense firm, which develops, and produces conventional medium caliber ammunition marketed to defense departments worldwide; designs, produces and markers sophisticated microwave security systems.