HBE Henry Bros. Electronics,

- Fourth quarter sales increase 21% over prior year quarter - Company moves from operating loss to operating profit FAIR LAWN, N.J., March 31 /PRNewswire-FirstCall/ -- Henry Bros. Electronics, Inc. (AMEX:HBE), a turnkey provider of technology-based integrated electronic security solutions, today announced results for the three and twelve months ended December 31, 2007. For the fourth quarter ended December 31, 2007, revenues were $17.59 million, an increase of 20.7% from revenues of $14.57 million in the comparable period of 2006. The New Jersey, Arizona and Colorado business segments each experienced significant increases in revenues over the same period in the prior year. On a sequential basis, revenues increased 11.0% from $15.86 million in the third quarter of 2007. The Company reported net income of $39,027, or $0.01 per diluted share, for the fourth quarter ended December 31, 2007, compared to a net loss of $(1.44 million), or $(0.25) per diluted share, in the comparable period of 2006. The fourth quarter 2007 includes a non-cash intangible asset impairment charge of $43,999, or $0.01 per diluted share and the fourth quarter 2006 includes a non-cash goodwill impairment charge of $1.2 million, or $0.21 per diluted share. During the fourth quarter ended December 31, 2007, the company recorded an operating profit of $0.2 million, compared to an operating loss of $(2.0 million) in the comparable period of 2006. Revenues for the fiscal year ended December 31, 2007 were $57.85 million, an increase of 37.3% from revenues of $42.13 million for the comparable period of 2006. The Company reported a net loss of $(0.3 million), or $(0.05) per diluted share, for the fiscal year ended December 31, 2007, compared to a net loss of $(2.26) million, or $(0.39) per diluted share, for the 2006 fiscal year. For the fiscal year ended December 31, 2007 the company recorded an operating profit of $36,582 compared to an operating loss of $(2.6) million in the 2006 comparable period. Backlog as of December 31, 2007 was $26.6 million compared to backlog of $27.8 million at December 31, 2006. James Henry, Chief Executive Officer of Henry Bros. Electronics, said, "I am very proud of the work that we did in 2007. Despite several challenges, we were able to meet our operating profit revised guidance. We launched a company-wide initiative to streamline our organization and to increase efficiencies, and the hard work that we put in began to show results in the second half of the year. During that period, we began to see more of our revenue fall through to our bottom line, and in spite of a soft first quarter, we were able to maintain a 2.5 percent profit margin, and to boost our revenues by over 46 percent as compared with 2006. During 2007 we also dramatically decreased our net loss from the previous period, and now stand poised to achieve solid and consistent profitability" Henry continued, "Our operating profit also increased significantly, both during the quarter and on the year. Our strong top line growth was driven by new business from long term satisfied customers who remain a steady source for new contracts for the foreseeable future. Looking forward to fiscal 2008, we continue to see several new business opportunities on the horizon, and we expect to ramp up our revenue stream. We believe we will have even more opportunities to enter other vertical markets in which our customers require an end-to-end solution for protecting the safety of their properties and, most important, the individuals who work or reside in them." Based on our 2007 year end backlog of $26.6 million, we are forecasting an operating profit of 4% for 2008 on $65 million of revenue. We expect revenue from various projects in our sales pipeline to have a significant impact in the second half of 2008, at which time we will revise our guidance as appropriate. 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 KCSA Strategic Communications Chairman & Chief Executive Officer 212-896-1215 / 212-896-1208 Henry Bros. Electronics, Inc. / 201-794-6500 HENRY BROS. ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the years ended For the three months ended December 31, December 31, 2007 2006 2007 2006 Revenue $57,852,216 $42,132,852 $17,598,478 $14,566,650 Cost of revenue 45,575,305 31,586,736 14,228,634 11,258,696 Gross profit 12,276,911 10,546,116 3,369,844 3,307,954 Operating expenses: Selling, general and administrative expenses 12,196,330 11,952,477 3,150,154 4,081,417 Goodwill and intangible asset impairment charges 43,999 1,191,000 43,999 1,191,000 Operating (loss) profit 36,582 (2,597,361) 175,691 (1,964,463) Interest income 73,493 19,515 37,400 5,782 Other expense (191) (674) 4,097 (674) Interest expense (349,907) (103,923) (91,611) (49,026) (Loss) income before tax expense (240,023) (2,682,443) 125,577 (2,008,381) Provision for (benefit from) income taxes 63,281 (422,305) 86,550 (569,370) Net (loss) income after taxes $(303,304) $(2,260,138) $39,027 $(1,439,011) BASIC (LOSS) EARNINGS PER COMMON SHARE: Basic (loss) earnings per common share $(0.05) $(0.39) $0.01 $(0.25) Weighted average common shares 5,768,864 5,749,964 5,768,864 5,749,964 DILUTED (LOSS) EARNINGS PER COMMON SHARE: Diluted (loss) earnings per common share $(0.05) $(0.39) $0.01 $(0.25) Weighted average diluted common shares 5,768,864 5,749,964 5,768,864 5,749,964 HENRY BROS. ELECTRONICS, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS December 31, 2007 2006 ASSETS CURRENT ASSETS Cash and cash equivalents $3,277,450 $199,853 Accounts receivable-net of allowance for doubtful accounts 13,306,558 13,628,358 Inventory 1,460,931 1,707,933 Costs in excess of billings and estimated profits 3,195,039 4,643,469 Deferred tax asset 739,563 906,255 Retainage receivable 1,708,125 1,390,468 Prepaid expenses and income tax receivable 900,924 454,801 Other assets 315,081 290,079 Total current assets 24,903,671 23,221,216 Property and equipment - net of accumulated depreciation 2,408,640 2,402,394 Goodwill 3,379,030 3,316,530 Intangible assets - net of accumulated amortization 1,183,547 1,436,414 Deferred tax asset 306,224 166,262 Other assets 150,458 151,145 TOTAL ASSETS $32,331,570 $30,693,961 LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $8,157,774 $5,973,047 Accrued expenses 3,128,965 4,786,203 Accrued taxes 139,403 58,914 Billings in excess of costs and estimated profits 1,577,002 1,167,259 Deferred income 206,460 476,775 Current portion of long-term debt 634,948 505,028 Revolving loan 3,635,897 - Other current liabilities 451,490 252,881 Total current liabilities 17,931,939 13,220,107 Long-term debt, less current portion 465,539 3,463,236 TOTAL LIABILITIES 18,397,478 16,683,343 STOCKHOLDERS' EQUITY Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares issued - - Common stock, $.01 par value; 10,000,000 shares authorized; 5,926,065 shares issued and outstanding in 2007 and 5,916,065 in 2006 59,261 59,161 Additional paid in capital 17,165,892 16,900,653 Accumulated deficit (3,291,061) (2,949,196) TOTAL EQUITY 13,934,092 14,010,618 TOTAL LIABILITIES & STOCKHOLDERS' EQUITY $32,331,570 $30,693,961 DATASOURCE: Henry Bros. Electronics, Inc. CONTACT: Investors: Todd Fromer, +1-212-896-1215, , or Erika Kay, +1-212-896-1208, , both of KCSA Strategic Communications for Henry Bros. Electronics, Inc.; Jim Henry, Chairman & Chief Executive Officer of Henry Bros. Electronics, Inc., +1-201-794-6500, Web site: http://www.hbe-inc.com/

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