Henry Bros. Electronics Reports Third Quarter Results

SADDLE BROOK, N.J. - Henry Bros. Electronics, Inc., a turnkey provider of technology-based integrated electronic security solutions, announced financial results for the three and nine months ended September 30, 2005.

Sales for the quarter ended September 30, 2005 increased $3,513,506 or 45% to $11,298,796 from $7,785,290 for the same period a year ago. On a sequential basis, sales increased $1,099,970 or 11% from $10,198,826 in the second quarter of 2005.

Net income for the quarter ended September 30, 2005, increased $174,812 or 155% to $287,822 or $0.05 per share, compared to $113,010, or $0.02 per share, for the same period in 2004. On a sequential basis, net income per share was in line with the 2005 second quarter of $0.05 per share.

Sales for the nine-month period ended September 30, 2005 increased $10,133,423 or 51% to $30,110,696 compared to $19,977,273 in the year-ago period. Net income for the nine-month period was $656,081 or $0.11 per share, compared to a net loss of $42,944, or ($0.01) per share, for the same periodin 2004.

Backlog as of September 30, 2005, was $14.8 million or $2.2 million below the June 30, 2005, backlog of $17 million, which represents the continued progress on completing two of our larger projects in the New York metropolitan market.

Jim Henry, Chief Executive Officer of Henry Bros. said, "We've made significant progress this quarter recognizing our backlog, and remain well positioned for future sales growth going forward. We continue to actively pursue homeland security projects within the New York Metropolitan area, and believe that due to our incumbencies with various large transportation authorities and our industry expertise to meet their needs in a cost effective manner, we will realize increased opportunity within this vertical market in the coming year. We have made considerable progress this quarter pursuing these projects, which traditionally have a long sell cycle."

"With our recent acquisition of Securus Inc., we've expanded our national presence into Colorado, which has consistently ranked among the top 10 fastest growing markets in the U.S. for the past five years. This acquisition opens the door to a number of opportunities for us based on our entry into this high growth market and our ability to leverage expanded capabilities and relationships from the acquisition in order to effectively pursue new business. As we work to integrate our two companies, we also expect to achieve operational efficiencies, which should create improved economies ofscale and operating leverage going forward," added Mr. Henry.

"We remain on track to meet our annual guidance for 2005 sales to be in the range of $36 to $40 million and net income for the year to be between $1.0 and $1.2 million, or $0.17 to $0.21 per share, with a target operating margin of 5 percent," concluded Mr. Henry.

Henry Bros. Electronics, Inc. is online at www.henrybroselectronics.com.