Vicon Reports Third Quarter Results

Foreign sales up following acquisition of Videotronic Infosystems


HAUPPAUGE, N.Y. -- Vicon Industries, Inc., a leading designer and producer of digital video security and surveillance systems, today reported operating results for the third fiscal quarter ended June 30, 2005. The announcement was made by Chairman and CEO Ken Darby.

Net sales for the third fiscal quarter were $14.0 million, compared with $13.6 million for the previous fiscal year period. A net loss was incurred of $548,000 ($.12 per share), compared with a net loss of $425,000 ($.09 per share) for the same period last fiscal year.

For the nine months, net sales were $42.4 million, compared with $40.1 million for the first nine months of the prior fiscal year. A net loss of $2.5 million ($.54 per share) was incurred compared with a net loss of $1.2 million ($.26 per share) for the year ago period.

Commenting on the third quarter results, Mr. Darby said sales results were mixed as U.S. revenues declined 7% to $7.5 million while foreign sales grew 18% to $6.5 million. All of the foreign sales growth, however, was attributable to Videotronic Infosystems GmbH, an entity whose operating and intangible assets were acquired on October 1, 2004. Excluding Videotronic, overall sales for the three months were down 11%. New sales orders in the third quarter totaled $14.2 million compared with $13.7 million for the year ago period. Quarterly operating expenses increased $517,000 principally as a result of higher foreign sales office expenses. Operating expenses included $184,000 of legal costs associated with ongoing patent litigation, Mr. Darby noted.

"While third quarter results were below plan they represented a significant improvement over the previous quarter. We continue to focus on lowering operating costs without materially affecting our strategic product development and marketing initiatives" said Mr. Darby.