FOR IMMEDIATE RELEASE

July 7, 2005

For More Information Contact:

Paul Runice, Treasurer

952.937.4003

MTS Signs Letter of Intent to Sell Engine Test Business

EDEN PRAIRIE, Minn. - July 7, 2005 - MTS Systems Corporation (Nasdaq: MTSC) today announced it has signed a letter of intent with A&D Co, Ltd (Tokyo Stock Exchange/Second Section: 7745), headquartered in Tokyo, Japan, providing A&D with an exclusivity period of 30 days to negotiate the purchase of MTS’ Powertrain Technology Division. The Division is located in Ann Arbor, Michigan and represents less than 5% of the Company’s revenue and assets for the current year. Terms of the letter were not disclosed.

Miller Johnson Steichen Kinnard, Inc. of Minneapolis, Minnesota is the financial advisor to MTS Systems Corporation for this transaction.

About MTS Systems Corporation

MTS Systems Corporation is a leading global supplier of test systems and industrial position sensors. The Company’s testing hardware and software solutions help customers accelerate and improve their design, development, and manufacturing processes and are used for determining the mechanical behavior of materials, products, and structures. MTS’ high-performance position sensors provide controls for a variety of industrial and vehicular applications. MTS had 1,615 employees and revenue of $367 million for the fiscal year ended October 2, 2004. Additional information on MTS can be found on the worldwide web at http://www.mts.com.