TelAlaska Uses Performance Technologies' SEGway™ Devices to Enable Low Cost SS7 over Satellite Communications

ROCHESTER, N.Y. - July 26, 2004 - Performance Technologies (Nasdaq NM: PTIX), a leading developer of platforms, components and software solutions for the communications, military and commercial markets, today announced TelAlaska is using the company's SEGway™ 1100 Link Replacement devices to facilitate low-cost, high quality phone communications throughout rural Alaska.

TelAlaska provides a wide range of telecommunications products and services to customers throughout Alaska, including local telephone access. SS7 messages are a necessary element to reliable telephone communications and are traditionally transmitted over circuit-based, dedicated SS7 links. These links are very expensive to lease and maintain in rural areas where the amount of traffic does not justify the cost of the link. TelAlaska is using Performance Technologies' SEGway 1100 Link Replacement devices to transmit SS7 messages over IP via satellite, allowing more cost-effective transport of signaling messages throughout the state.

"TelAlaska has a long tradition of providing telecommunications services for customers throughout rural Alaska . Performance Technologies' SEGway devices enable us to continue to offer cutting edge services to our customers, while significantly reducing our own network transport costs," said Jim Mathe, telecom network director for TelAlaska. "This allows us to leverage contemporary IP network infrastructure to deliver top quality service to our customer base at a competitive rate."

Performance Technologies' SEGway 1100 Link Replacement device is designed to save telecom carriers the leasing or provisioning costs associated with SS7 links by reliably transporting SS7 messages over managed, shared-use IP networks rather than over dedicated, long haul SS7 links. The 1U, 19", rack mountable device is especially effective for IP transport of SS7 traffic over satellite as it uses SCTP (Stream Control Transmission Protocol) to ensure voice quality. It also has the ability to filter unnecessary traffic to help the SS7 link tolerate the inherent delay of satellite transport while reducing overall bandwidth requirements.

"We designed our SEGway Link Replacement device precisely for companies like TelAlaska to help lower their costs while being able to provide new revenue-generating services to customers," said Deb Brunner Walker, product manager for Performance Technologies. "Our SEGway products are facilitating the use of IP communication networks for wireless and wireline telecommunications services at more than one hundred locations worldwide."

About TelAlaska

TelAlaska is a state wide, full service telecommunications provider whose roots were established in rural Alaska 35 years ago. The company provides local telephone service, advanced data services, dial-up, DSL and cable modem Internet service, cable television and wireless Internet services. For more information contact www.telalaska.com.

About Performance Technologies

Performance Technologies ( Nasdaq NM : PTIX) develops the platforms, components and software solutions for the world's evolving communications infrastructure. Our broad customer base includes companies in the communications, military and commercial markets. Serving the industry for more than 20 years, our complete line of packet-based products enables equipment manufacturers and service providers to offer highly available and fully-managed systems with time-to-market, performance and cost advantages.

Performance Technologies is headquartered in Rochester, New York. Additional operational and engineering facilities are located in San Diego and San Luis Obispo, California; Norwood, Massachusetts and Ottawa, Canada.

Forward Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for certain forward-looking statements. This press release contains forward-looking statements, which reflect the Company's current views with respect to future events and financial performance, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and is subject to the safe harbor provisions of those Sections.

These forward-looking statements are subject to various risks and uncertainties and the Company's actual results could differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, among other factors, general business and economic conditions, rapid technological changes accompanied by frequent new product introductions, competitive pressures, dependence on key customers, the attainment of design wins, fluctuations in quarterly and annual results, the reliance on a limited number of third party suppliers, limitations of the Company's manufacturing arrangements, the protection of the Company's proprietary technology, the dependence on key personnel, potential delays associated with the purchase and implementation of an enterprise-wide software system and potential impairments of investments. These statements should be read in conjunction with the audited Consolidated Financial Statements, the Notes thereto and Management's Discussion and Analysis of Financial Condition and Results of Operations of the Company as of December 31, 2003, as reported in its Annual Report on Form 10-K, and other documents as filed with the Securities and Exchange Commission.

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