CLIFTON, N.J., May 14 /PRNewswire-FirstCall/ -- Electronic Control Security, Inc. (OTC:EKCS) (BULLETIN BOARD: EKCS) (ECSI), a leading provider of a broad line of electronic security system technologies to the government and private sectors, announced financial results of operations for the nine and three months ended March 31, 2009. Arthur Barchenko, President and CEO, stated, "We had net revenues of $3,003,136 for the nine months ended March 31, 2009 compared to $1,891,508 for the corresponding nine month period in 2008, representing an increase of approximately 59%. Net revenues for the three months ended March 31, 2009 were $564,946 as compared to $437,133 for the corresponding three month period in 2008. The increase in net revenues during the 2009 periods compared to the 2008 periods is primarily attributable to orders on contracts in-house for the United Nations program and nuclear power station orders received during the 2009 periods." Further, "Gross margins for the nine months ended March 31, 2009 were 30.9% compared to 36.8% of revenue for the corresponding nine months in 2008. Gross margins were 54.9% of revenue for the three months ended March 31, 2009 compared to 66.5% for the corresponding period in 2008. The decrease in gross margins for the nine months ended March 31, 2009 compared to the corresponding period in 2008 is primarily attributable to a change in the order mix of equipment sales and support services. We encountered an increase in material cost while experiencing a decrease in higher margin design and engineering support service billings which, combined, resulted in the decrease in gross margins for both the nine-month and three-month periods ended March 31, 2009." Mr. Barchenko then stated that the selling, general and administrative expenses for the nine and three months ended March 31, 2009 were $1,064,201 and $520,846, respectively, compared to $937,899 and $200,634 for each of the corresponding periods in 2008. "The increase in selling, general and administrative expenses is primarily attributable to costs relating to the United Nations project in Ethiopia where we incurred significant expense increases and an increase in allowance for doubtful accounts of approximately $296,000 related to two projects in Asia and the Middle East." Net loss from operations decreased to $(314,735) for the nine months ended March 31, 2009 from $(458,293) for the corresponding period in 2008. For the three months ended March 31, 2009, there was a net loss from operations of $(255,977) compared to net income of $64,456 for the corresponding period in 2008. The net loss before deemed dividends related to preferred stock for the nine months ended March 31, 2009 decreased to $(496,142) compared to $(841,486) for the corresponding period in 2008. For the three months ended March 31, 2009, there was a net loss of $(284,967) compared to a loss of $(4,194) in the corresponding quarter in 2008 due primarily to the one time charge of $296,000 representing an increase in the allowance for doubtful accounts as noted above. As of March 31, 2009, approximately $490,000 in principal amount of convertible debentures remains outstanding. The principal owing on the debentures became due as of January 11, 2009 but was not repaid. The Company and the debenture holders continue in an effort to resolve this matter. No assurance can be provided that the Company and the debenture holders will in fact be able to reach a resolution of the matter. During the quarter ended March 31, 2009, the Company submitted proposals valued at approximately $2,650,000 for Department of Defense facilities and certain nuclear power stations in the U.S. and southeast Asia. The proposals are pending and awaiting approval, funding and award. The Company anticipates decisions relating to these proposals within the fourth quarter of fiscal 2009. A more detailed description of our business, results of operations and financial statements are contained in the Quarterly Report on Form 10-Q filed on May 13, 2009. ABOUT ECSI ECSI is recognized as a global leader in perimeter security and an effective quality provider for both the Department of Defense and Homeland Security programs. The Company designs, manufactures and markets physical electronic security systems for high profile, high threat environments. The employment of risk assessment and analysis allows ECSI to determine and address the security needs of government and commercial-industrial installations. The Company has teaming agreements with major system integrators in both the United States and overseas to support the installation and aftermarket. ECSI is located at 790 Bloomfield Avenue, Bldg. C-1, Clifton, NJ 07012. Tel: 973-574-8555; Fax: 973-574-8562. For more information on ECSI and its customers, please visit http://www.ecsiinternational.com/. ECSI INTERNATIONAL, INC. SAFE HARBOR STATEMENT: This press release contains forward-looking statements that involve substantial uncertainties and risks. These forward-looking statements are based upon our current expectations, estimates and projections about our business and our industry and reflect our beliefs and assumptions based upon information available to us at the date of this release. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including but not limited to changes in economic conditions generally and in our industry specifically, changes in security technology, legislative or regulatory changes that affect us, the availability of working capital, changes in costs and the availability of goods and services, the introduction of competing products, changes in our operating strategy or development plans, our ability to attract and retain qualified personnel, changes in our acquisition and capital expenditure plans, sufficiency of cash reserves and the risks and uncertainties discussed under the heading "RISK FACTORS" in Item 1 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2008 and in our other filings with the Securities and Exchange Commission. We undertake no obligation to revise or update any forward-looking statement for any reason. DATASOURCE: Electronic Control Security, Inc. CONTACT: Natalie Schneider, +1-973-574-8555 Web Site: http://www.ecsiinternational.com/

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