Cantronic Reports Results for Q1 Ended April 30, 2011: Revenue from Continuing Operations Increased 198% With Net Income $344...

Cantronic Systems Inc., ("Cantronic" or the "Company") (TSX VENTURE:CTS)(PINK
SHEETS:CRIXF) today announced its financial results for the first quarter of
fiscal year 2012 ended April 30, 2011. All amounts are reported in Canadian
dollars unless otherwise stated. Cantronic is reporting results from continuing
and discontinued operations to allow investors to review Cantronic's China-based
video surveillance technology and solutions business separately from the North
American thermal imaging business (which was sold during the first quarter of
fiscal year 2012).


Selected highlights of the year and subsequent events:

Financial:



--  Revenue of $4.52 million from continuing operations, an increase of 198%
    compared to $1.51 million for the corresponding quarter of the previous
    fiscal year. 
--  Adjusted EBITDA (a non-GAAP term) from continuing operations was $510K
    compared to a loss of $1.0 million for the corresponding quarter of the
    previous fiscal year. The Company uses adjusted EBITDA (a non-GAAP
    financial measure) internally to make strategic decisions, forecast
    future results and evaluate its performance, defined as net income
    before interest, income taxes, depreciation, amortization, stock based
    compensation expenses, foreign currency loss, and minority interest. 
--  Gross margin from continuing operations of $1.44 million (32% of
    revenue) compared to $528K (35% of revenue) for the corresponding
    quarter of the previous fiscal year. Management expects gross margin to
    be between 35% and 45% for the entire FY ending January 31, 2012. 
--  Net Income from continuing operations (after minority interest) was
    $345K or $0.01 per share vs. a net loss of $1.40 million from continuing
    operations or $0.02 per share in the corresponding quarter of the
    previous fiscal year. 
--  Sales and distribution expenses approximately doubled in the quarter to
    $463,184 (compared to $231,243 for the previous year's quarter).
    Management has increased expenditures for sales and marketing (including
    attendance at trade shows in China and internationally) in order to
    drive sales, with results already visible in the current quarter.
    General and administrative expenses increased by 18% over the previous
    year's quarter to $997,180 (if one excludes one-time transaction costs
    in last year's Q1 relating to the acquisition of Actiontop) as
    management continues to build its platform to penetrate the Chinese
    market and explore business and potential acquisition opportunities. 

Operating results                                                           
($000's except per share amounts)                                           
                                                                            
                                              Q1 Fiscal 2012  Q1 Fiscal 2011
                                                     Quarter         Quarter
                                                 ended April     ended April
                                                    30, 2011        30, 2010
                                                                            
Revenue from continuing operations                     4,517           1,515
----------------------------------------------------------------------------
Adjusted EBITDA                                          510          -1,033
Net income to shareholders                               319            -914
Net earnings (loss) per share, basic and                                    
 diluted                                                0.01           -0.02
----------------------------------------------------------------------------
                                                  
Business:                                         

--  During Q1 FY 2012, Cantronic sold its North American business,
    comprising the thermal imaging business located in Coquitlam, British
    Columbia as well as QWIP Technologies, Inc. of Brea, California. The
    total consideration of this disposition amounted to $5.7 million with a
    present value of $3.85 million, resulting a pre-tax gain of $378K. 
--  In August 2010, Cantronic was awarded a RMB 25 million (approximately
    $3.9 million) contract to provide to act as the primary contractor for a
    city-wide networked video surveillance system under China's Safe City
    program for the city of Haicheng, Liaoning Province. As of July 26,
    2011, about 40% of the project has been completed and the rest of the
    project is expected to be completed within 3 - 6 months. 
--  Subsequent to the quarter end, Cantronic announced on June 14, 2011 it
    had entered into an arrangement as an Original Design Manufacturer
    ("ODM") with Digital China Holdings Limited of Beijing ("Digital China")
    to design and manufacture a customized version of Cantronic's most
    popular digital IP (Internet Protocol) video camera under Digital
    China's AMPON brand of security products. The product has already been
    successfully introduced to market, with sales volume expected to reach
    RMB 12 million (about Canadian $1.8 million) by the end of calendar
    2011. 
--  Subsequent to the quarter end, on July 18, 2011, Cantronic announced
    that it was awarded a contract to provide video security and protection
    systems in China's Jiangsu province totalling RMB 30 million
    (approximately Canadian $4.5 million). The project will begin in
    September 2011 with duration of one to two years. Cantronic will supply
    and install complete solutions that will integrate video surveillance
    with smart building systems, such as video intercom, access control and
    alarm monitoring. 



"Revenue from continuing operations almost tripled in Q1 FY 2012, with adjusted
EBITDA increased significantly and the Company reporting positive net earnings
from continuing operations. This was achieved in what is usually the least
seasonally strong quarter due to the Chinese New Year holidays. Cantronic has
continued to announce integration contracts for the Chinese video security and
surveillance market and ODM agreements with major industry players as well as
providing its key technologies in video management software, IP video cameras
and dome cameras," remarked James Zahn, President and CEO of Cantronic Systems.


Regulatory Filings

The material will be available through SEDAR at www.sedar.com and on the
Company's website, www.cantronicsecurity.com.


About Cantronic Systems Inc.

Cantronic Systems Inc. manufactures, distributes, and provides training and
services in the fields of IP-based networked video security surveillance
technologies, specializing in networked video management software and video
analytics, IP cameras, speed dome cameras, high definition video surveillance
cameras and night vision surveillance systems for demanding security and
surveillance applications.


Cantronic, through its China subsidiaries Cantronic Security Systems (China) Co.
Ltd., Beijing Advanced Videoinfo Technology Co. Ltd. ("AVINFO"), Shenzhen
Huanghe Digital Technology Co. Ltd. ("Yellow River") and Actiontop Electronics
(Shenzhen) Co. Ltd. ("Actiontop") provides high-speed and digital networked
video surveillance solutions to government and corporate customers in China.


Cantronic is a Tier 1 issuer on the TSX-V exchange, trading under the symbol
CTS. For further information about Cantronic and Cantronic China, please visit
our websites at www.cantronicsecurity.com and www.cantronics.com.cn.


Forward-looking statements

This news release contains forward-looking statements, within the meaning of
applicable securities legislation, concerning Cantronic Systems Inc. and the
markets in which it operates. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause actual results,
performance and achievements of Cantronic to be materially different from any
future results, performance or achievements expressed or implied by said
forward-looking statements.


Forward-looking statements include, but are not limited to: the completion of
the Proposed Transaction, anticipated share capital following completion of the
Proposed Transaction, expectations, opinions, forecasts, projections and other
similar statements concerning anticipated future events, conditions or results
that are not historical facts. In certain cases, forward-looking statements can
be identified by the use of words such as "plans", "expects" or "does not
expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not anticipate", or "believes", or variations
of such words and phrases or statements that certain actions, events or results
"may", "could", "would", "might" or "will be taken", "occur" or "be achieved".


Readers are cautioned not to place undue reliance on such forward-looking
statements. Forward-looking information is provided as of the date of this news
release, and Cantronic Systems Inc. assumes no obligation to update or revise
them to reflect new events or circumstances, except as may be required under
applicable securities laws.