CompuDyne Corporation Announces New $20 Million Revolving Credit Facility.

ANNAPOLIS, Md. -- CompuDyne Corporation (Nasdaq:CDCY), an industry leader in sophisticated security products, integration and technology for the public security markets, today announced that it has put in place a $20 million revolving credit facility with PNC Bank, N.A.

In connection with the execution of the Second Amended and Restated Revolving Credit and Security Agreement (the "Agreement"), the Borrowers are providing the Banks with Collateral that includes all Receivables, Equipment, General Intangibles, Inventory, Investment Property, Real Property and Subsidiary Stock. The Agreement allows the Company to obtain Advances in an amount of up to $20,000,000. Revolving Advances are limited by a formula based upon the value of the Company's receivables, inventory, fixed assets, Real Property and issued and outstanding Letters of Credit. The Agreement will continue in full force and effect until December 18, 2008 unless terminated earlier in accordance with its terms.

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 and the demand for the Company's products, competitive factors and pricing pressures, changes in legislation, regulatory requirements, government budget problems, the Company's ability to secure new contracts, the ability to successfully grow the Company by completing acquisitions, the ability to remain in compliance with its bank covenants, delays in government procurement processes, ability to obtain bid, payment and performance bonds on various of the Company's projects, technological change or difficulties, the ability to refinance debt when it becomes due, product development risks, commercialization difficulties, adverse results in litigation, the level of product returns, the amount of remedial work needed to be performed, costs of compliance with Sarbanes-Oxley requirements and the impact of the failure to comply with such requirements, risks associated with internal control weaknesses identified in complying with Section 404 of Sarbanes-Oxley, the Company's ability to realize anticipated cost savings, the Company's ability to simplify its structure and modify its strategic objectives, and general economic conditions. Risks inherent in the Company's business and with respect to future uncertainties are further described in its other filings with the Securities Exchange Commission, such as the Company's Form 10-K, Form 10-Q, and Form 8-K reports.