Henry Bros. Electronics, Inc. Reports Third Quarter 2009 Results

FAIR LAWN, N.J., Nov. 12  /PRNewswire-FirstCall/ -- Henry Bros. Electronics, Inc. (NASDAQ:HBE), a turnkey provider of technology-based integrated electronic security solutions, today announced results for the third quarter ended September 30, 2009.

The Company reported revenue of $12.1 million for the three months ended September 30, 2009, representing a slight decrease from revenue of $12.3 million for the same period a year ago. This decline is due principally to the protracted credit freeze and economic downturn which is having a significant negative impact on construction markets and capital spending patterns of commercial businesses. Partially offsetting this decline was an increase in revenue resulting from the Company's agreement with a division of L-3 Communications, which is part of L-3's project for the U.S. Marine Corp. Systems Command to deliver a Tactical Video Capture System ("TVCS"). TVCS is used for real-time visualization and situational awareness while Marine units are conducting military operations in urban terrain training exercises.

The Company reported a net loss of $357,382 or $0.06 per diluted share, for the third quarter ended September 30, 2009, compared to net income of $210,782, or $0.04 per diluted share, in the comparable period of 2008. The Company's net loss is principally the result of the reduction in revenue, pressure on gross profit margins and the costs associated with the investment in a larger sales staff.

Revenue for the nine-month period ended September 30, 2009 was $41.4 million, representing a decrease of 4.4% over revenue of $43.3 million for the nine months ended September 30, 2008.  The Company had a net loss for the 2009 nine-month period of $136,007, or $0.02 per diluted share, compared to net income of $832,000, or $0.14 per diluted share, for the 2008 nine-month period.

Jim Henry, CEO of Henry Bros. Electronics, commented, "A poor business climate and new, hence unforeseen, administrative requirements which caused delays in the TVCS project resulted in what is, undoubtedly, a disappointing quarter. During the first and second quarters we began to see increased competition for fewer jobs and longer negotiated sales cycles. These conditions persisted into the third quarter. However, we are confident this shift will not be permanent as the economy recovers."

Henry continued, "Despite the fact that our business has become more competitive, our TVCS and other incumbent business is still strong. Going forward, we intend to maintain and grow market share, and to find new and innovative areas for revenue growth. We will also continue to effectively manage our work force and will remain ready to take advantage of the spending that has now shifted into 2010."

The Company's backlog as of September 30, 2009 was $23.8 million, and flat when compared to the $23.7 million at December 31, 2008.

As a result of the protracted credit freeze, lingering recessionary conditions, and continued delays related to the Company's TVCS project, the Company is lowering its guidance from an operating profit of 3-5% on revenue of $65 million to $70 million for fiscal 2009, to an essentially break-even operating profit on revenue of between $50 million and $55 million for fiscal 2009.

In another development, at its November 11th meeting, the Board of Directors appointed Richard D. Rockwell, 54, as Chairman of the Company's Board of Directors. Rockwell has served on the Henry Bros. Board since November 2007. Jim Henry will continue as Company CEO and Treasurer, as well as serve as Vice-Chairman of the board.

Henry commented on the appointment of Rockwell, stating, "Rick has been a major contributor on the Board for these past two years. I am pleased that we will now be able to utilize his talents in a more prominent role. Our Company launched a major new offering of managed and professional services in September 2009. Given his 30-year background in the recurring revenue security service business, we expect Rick to help us to leverage our technical excellence to broaden our reach in these areas."

Rockwell also commented, stating "I have great confidence in the leadership of Jim Henry and Brian Reach. The Company clearly has advanced capabilities and superior technical expertise. Jim, Brian, and I, have a shared vision of building on the Company's successes for the benefit of its customers, shareholders, and employees. I look forward to working with them even more closely in the future."

Conference Call Information:

Henry Bros. Electronics will be hosting a conference call on November 12, 2009, at 11 a.m. ET.  To participate on the call, please use the following number and conference code:

                           [phone] (Domestic)
                         [phone] (International)
                            Conference code: 39871791



A replay of the call will be available from 11/12/2009  at 12 p.m., ET, through 12/12/2009  at 11:59 p.m., ET.  To access the replay, please call [phone] in the United States or [phone] outside the United States.  To access the replay, users will need to enter the following code: 39871791.

About Henry Bros. Electronics, Inc.

Henry Bros. Electronics (NASDAQ: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 $50 million to $55 million or an essentially breakeven operating profit in 2009. 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
  KCSA Strategic Communications
  212-896-1215
  

  Jim Henry, Vice- Chairman & Chief Executive Officer
  Henry Bros. Electronics, Inc.
  201-794-6500
  







                     HENRY BROS. ELECTRONICS, INC. AND SUBSIDIARIES
                    CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


                                (Unaudited)                  (Unaudited)
                             Nine months ended           Three months ended
                               September 30,                September 30,
                           --------------------         --------------------
                            2009          2008           2009          2008
                            ----          ----           ----          ----
  Revenue            $41,389,229   $43,292,368    $12,109,037   $12,262,372
  Cost of revenue     30,255,049    32,148,857      9,086,980     8,649,920
                      ----------    ----------      ---------     ---------
    Gross profit      11,134,180    11,143,511      3,022,057     3,612,452
  Operating expenses:
  Selling, general &
   administrative
   expenses           11,015,124     9,461,002      3,452,480     3,204,834
                      ----------     ---------      ---------     ---------
  Operating profit
   (loss)                119,056     1,682,509       (430,423)      407,618

  Interest income         21,023        73,732         11,986        20,751
  Other income            29,274         9,656         13,481         1,408
  Interest expense      (222,333)     (209,211)       (56,926)      (66,483)
                        --------      --------        -------       -------
  (Loss) income before
   tax expense           (52,980)    1,556,686       (461,882)      363,294
  Tax expense (benefit)   83,027       724,686       (104,500)      152,512
                          ------       -------       --------       -------
  Net (loss) income    $(136,007)     $832,000      $(357,382)     $210,782
                       =========      ========      =========      ========


  BASIC (LOSS) EARNINGS PER COMMON SHARE:
  ---------------------------------------
  Basic (loss)
   earnings per
   common share           $(0.02)        $0.14         $(0.06)        $0.04
                          ======         =====         ======         =====
  Weighted average
   common shares       5,859,400     5,783,425      5,877,798     5,798,108
                       =========     =========      =========     =========

  DILUTED (LOSS) EARNINGS PER COMMON SHARE:
   -----------------------------------------
  Diluted (loss)
   earnings per
   common share           $(0.02)        $0.14         $(0.06)        $0.04
                          ======         =====         ======         =====
  Weighted average
   diluted
   common shares       5,859,400     5,975,221      5,877,798     5,989,904
                       =========     =========      =========     =========


DATASOURCE: Henry Bros. Electronics Inc.



CONTACT:  Investor, Todd Fromer of KCSA Strategic Communications,

[phone], ; or Jim Henry, Vice- Chairman & Chief

Executive Officer of Henry Bros. Electronics, Inc., [phone],





Web Site:  http://www.henrybroselectronics.com/ 

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