Henry Bros. Electronics, Inc. Reports Second Quarter 2008 Results

Aug. 14, 2008

FAIR LAWN, N.J. , Aug. 14 /PRNewswire-FirstCall/ -- Henry Bros . Electronics, Inc. (Amex: HBE), a turnkey provider of technology-based integrated electronic security solutions, today announced results for the second quarter ended June 30, 2008 .

The Company reported revenue of $15.1 million for the second quarter of 2008, representing an increase of 11.9% over revenue of $13.5 million for the same period a year ago. The New Jersey subsidiary experienced a significant increase in revenue as a result of work completed on contracts for several large public agencies in the New York Metropolitan area. Revenue improvement from the Arizona and Virginia subsidiaries also contributed to the Company's top-line growth in the second quarter of 2008.

The Company reported net income of $337,261, or $0.06 per diluted share, for the second quarter ended June 30, 2008 , representing an increase of 125% over net income of $150,044, or $0.03 per diluted share, in the comparable period of 2007.

Revenue for the six-month period ended June 30, 2008 was $31.0 million, representing an increase of 27.2% over revenue of $24.4 million for the six months ended June 30, 2007 . Net income for the 2008 six-month period was $621,218, or $0.10 per diluted share, compared to a net loss of $(670,371), or $(0.12) per diluted share, for the 2007 six-month period.

Backlog as of June 30, 2008 was $17.6 million, compared to $26.6 million reported at December 31, 2007 . The decline in backlog is a primary result of work completed on several large agency jobs in the New York Metropolitan area which were booked in the second quarter of 2007. The Company expects to receive initial purchase orders in the amount of approximately $5.8 million under our previously disclosed subcontractor agreement with L-3 prior to the end of August 2008 .

Jim Henry , CEO of Henry Bros . Electronics, stated, "We are pleased to report continued success on a number of large-scale, multi-year integrated security projects. Our ability to customize security solutions for large businesses and enterprises located in major metropolitan areas has enhanced our market position, elevating our Company to the forefront of our nation's most critical security jobs."

Henry concluded, "Through our work with L-3 Communications, we are now playing an integral role in the implementation of a Tactical Video Capture System planned for installation at 15 U.S. Marine bases in the USA and abroad. This project, valued at $326 million, of which we have a significant work share, brings the most state-of-the-art technology to the USMC. Our role in this important endeavor demonstrates the value of our solutions and services, and has the power to bring forth additional opportunities in the future to serve the needs of other large enterprises that require the most advanced video surveillance systems."

Excluding the effect from the L-3 Contract discussed above, the Company is reiterating its forecasted operating profit margin of 4% on $65 million of revenue for fiscal 2008. In addition, the Company is currently in the process of finalizing an increase in its Revolving Credit Agreement with TD Banknorth from $4 million to $8 million in order to support these new projects and growth initiatives.

Conference Call Information:

Henry Bros . Electronics will be hosting a conference call on Thursday, August 14, 2008 , at 11:00 a.m. ET . To participate on the call, please use the following number and conference code:

(888) 562-3356 (Domestic) (973) 582-2700 (International) Conference code: 58917161

A replay of the call will be available from Thursday, August 14, 2008 at 12:00 p.m., ET , through Sunday, September 14, 2008 at 11:59 p.m., ET . To access the replay, please call (800) 642-1687 in the United States or (706) 645-9291 outside the United States . To access the replay, users will need to enter the following code: 58917161.

About Henry Bros . Electronics, Inc.

Henry Bros . Electronics (Amex: HBE) provides technology-based integrated electronic security systems, services and emergency preparedness consultation to commercial enterprises and government agencies. The Company has offices in Arizona , California , Colorado , Maryland , New Jersey , New York , Texas and Virginia .

For more information, visit http://www.hbe-inc.com .

Safe Harbor Statement: Certain statements in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Forward-looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. In particular, there can be no assurance that the Company will achieve revenues of $65 million or a 4% operating profit in 2008. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained under the heading of risk factors listed in the Company's filings with the U.S. Securities and Exchange Commission. Henry Bros . Electronics Inc. does not assume any obligation to update the forward- looking information.

Investor Contacts: Todd Fromer / Erika Kay Jim Henry, Chairman & KCSA Strategic Communications Chief Executive Officer 212-896-1215 / 212-896-1208 Henry Bros. Electronics, Inc. tfromer@kcsa.com / ekay@kcsa.com 201-794-6500 jhenry@hbe-inc.com HENRY BROS. ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Unaudited) Six months ended June 30, Three months ended June 30, 2008 2007 2008 2007 Revenue $31,029,997 $24,392,499 $15,123,951 $13,521,198 Cost of revenue 23,866,396 18,956,044 11,503,335 10,240,919 Gross profit 7,163,601 5,436,455 3,620,616 3,280,279 Operating expenses: Selling, general & administrative expenses 5,888,710 6,246,153 2,905,652 2,981,986 Operating profit (loss) 1,274,891 (809,698) 714,964 298,293 Interest income 52,981 21,273 22,937 14,332 Other income (expense) 8,248 (3,369) 4,034 (3,110) Interest expense (142,728) (167,189) (65,995) (96,732) Income (loss) before tax expense 1,193,392 (958,983) 675,940 212,783 Tax expense (benefit) 572,174 (288,612) 338,679 62,739 Net income (loss) $621,218 $(670,371) $337,261 $150,044 BASIC EARNINGS (LOSS) PER COMMON SHARE: Basic profit (loss) per common share $0.11 $(0.12) $0.06 $0.03 Weighted average common shares 5,772,864 5,749,964 5,772,864 5,749,964 DILUTED EARNINGS (LOSS) PER COMMON SHARE: Diluted profit (loss) per common share: $0.10 $(0.12) $0.06 $0.03 Weighted average diluted common shares 5,976,008 5,749,964 5,976,008 5,749,964

SOURCE Henry Bros . Electronics, Inc.

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