CompuDyne Awarded New U.S. Embassy Contract; $2.3 Million Award for Blast Resistant Windows and Doors; U.S. State Department to Accelerate Building Program.

Business Editors/High-Tech Writers

HANOVER, Md.--(BUSINESS WIRE)--March 23, 2004

CompuDyne Corp. (Nasdaq:CDCY) an industry leader in sophisticated security products, integration and technology for the public security markets, has been awarded a $2.3 million contract to provide blast and attack resistant windows and doors for a new U.S. embassy building.

The new embassy building will be located in Kingston, Jamaica and will be built under the direction of Fluor Construction, the general contractor, and its J.A. Jones subsidiary. Work is expected to begin on this contract during the third quarter of 2004.

This embassy represents the first award to CompuDyne out of a group of eight embassy buildings awarded to general contractors in the Fall of 2003. CompuDyne has bid on all eight embassies to various general contractors; to date two have been awarded to security contractors, including this one.

A second group of eight to ten new embassies are expected to be awarded to general contractors later in 2004.

After the tragic events of September 11, 2001, the U.S. government significantly expanded and accelerated its program to replace many of its embassies with buildings or compounds that provide better protection from terrorist attacks. These current awards reflect that accelerated program. President Bush's recent budget proposal outlines a further acceleration, with plans to construct "150 new safe, secure and functional embassy and consulate compounds over fourteen years (2005 - 2018), at an approximate cost of $17.5 billion."

The Company cautioned that while the increased award activity and increasing backlogs bodes well for intermediate and longer term results, the Company is currently being seriously impacted by the declining backlogs experienced over the past year.

CompuDyne's Norshield subsidiary manufactures a complete line of embassy grade bullet, blast and attack resistant windows and doors, as well as a broad array of guard booths, bollards, and security barriers.

Certain statements made in this press release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including those statements concerning the Company's expectations with respect to future operating results and other events. Although the Company believes it has a reasonable basis for these forward-looking statements, these statements involve risks and uncertainties that cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors which could cause actual results to differ from expectations include, among others, capital spending patterns of the security market, the Company's ability to secure new contracts and the risks inherent in CompuDyne's business and future uncertainties which are further described in its filings with the Securities and Exchange Commission, such as the Company's Form 10-K, Form 10-Q, and Form 8-K reports.