Multi-Mix Plays Large Role In Merrimac's Future

• Price = $8.05
• Trailing GAAP EPS = $0.89
• Geo Calculated Fully-Taxed Trailing Non-GAAP EPS = $0.68
• Fully-Taxed EPS Estimate = $1.08
• P/E based on Fully-Taxed Trailing Non-GAAP EPS = 11.83
• Geo Calculated PEG Ratio: $0.59
  
  Reasons for Optimism

1. MRM meets 8 out of 10 GeoBargain® Requirements.
   
   

   ?	Requirement	Comments
   	Recent 52-week High(generally within 3 months)	Must Reach $13.38
   	30% EPS Growth Rate	2nd Qtr. 2009 EPS increased 425.0% Full year 2009 Geo estimates implies a Non-GAAP EPS growth rate of 391.0%
   	10% Revenue Growth	2nd Qtr. 2009 revenue increased 8.0%. Full year 2009 Geo estimate implies a revenue growth rate of 20.7%
   	Strong Balance Sheet	As of 2nd Qtr 2009
   yes	Positive Operating Cash Flow	$612 K as of 6 Mo.. 2009
   yes	L-T Debt to Equity Ratio less than 20%	14.37%
   yes	Current Ratio is at least 2:1	4.48:1
   	Tax-Adjusted Return on Equity is at least 15%	11.3%
   	Minimum Pre-tax Non-GAAP Operating Margins of 8%	11.9% as of 2nd Qtr. 2009
   	Preferably Under 50 Million Shares	3.0 Million shares as of 2nd Qtr. 2009
   	High Insider Ownership (generally greater than 15%)	23.9%
   	Limited Institutional Ownership (generally less than 20%)	>20%
   	P/E Divided by Growth Rate (PEG Ratio) is Less Than 1.	0.59

   
   
2. Restructuring efforts are paying off; In 1997 under new management direction, MRM embarked on an ongoing mission to refocus the company's efforts.
   
   
   • Reduced target customer count from 1000 to approximately 100. This made it easier for Merrimac to track and focus on its strongest customers, while giving them added attention.
   • Visibility - Working closely with a more defined list of companies allows Merrimac to better assess the future project pipelines of its customers and efficiently deploy resources.
   • Made a strategic decision to reduce its reliance on speculative commercial projects.
   • Focus on military and Satellite customers who are increasingly seeing the benefits that multi mix technology offers.
     
     
3. Customer Loyalty.
   
   
   • Merrimac works closely with its customers to meet product goals. This can happen at several steps in the development process including RD and manufacturing.
   • Once a company has found a reliable "partner" such as Merrimac, it would rather stay with the Company than have to restart the development process.
   • Once Merrimac has successfully worked with a division of a particular client, attracting other inter-company divisions becomes a natural occurrence.
     
     
4. The Company is the pioneer of Multi-Mix(R) technology allowing for a reduction in size and weight of subassemblies while maintaining reliability and performance.
   
   
   • Offers greater flexibility than old technology.
   • Performance efficiencies.
   • Lighter weight .
   • Ultimately saves companies money.
   
   Note: The GeoTeam encourages investors to familiarize themselves with Merrimac 's multi-mix technology in order to fully understand its numerous growth opportunities.
   
   
5. Positive outlook
   
   
   • Positive comments in 2nd quarter 2009 conference call.
     
     "We are in pricing negotiations on large pieces of business that we expect to be booking in Q3 and Q4 respectively. If this timing holds up in the third quarter it will set a new quarterly booking record."
     
     "For the year 2009 we expect that the book to bill ratio will exceed 1-to-1. We are pleased with our six months 2009 operating results. We are clearly executing our new strategy well, as reflected in our financial highlights. As mentioned earlier, we anticipate our Q3 bookings will be a record and we also anticipate a strong Q3 operating performance."
     
     
   • Multi-Mix technology is still in its infancy and just beginning to gain industry wide awareness.

Potential Valuation Scenarios if the company can achieve its EPS growth goals

Short-Term Potential value based on fully taxed adjusted trailing EPS

P/E 25 * $0.68 = $17.00
P/E 20 * $0.68 = $13.60

Short-term Potential Value based on GeoTeam Fully-Taxed EPS Estimate

P/E 15 * $1.08 = $16.20

^a MRM is not paying a full U.S. tax rate. Therefore, all EPS numbers have been adjusted by the GeoTeam to reflect a U.S. tax rate of 36%
^b Non-GAAP EPS Figures exclude certain non-operating gains and losses as well as certain non-cash items. Non-GAAP information should not be viewed in isolation or as a substitute for reported, or GAAP information. The GeoTeam® Non-GAAP figures may, from time to time, differ from company supplied figures.
^c Based on GeoTeam® implied 2009 revenue growth rate of 20%, as previously stated.

These scenarios are not intended to be investment advice, but are scenarios based on some commonly used investment guidelines. They are provided to aid investors in making their own investment decisions.