CompuDyne Corporation Announces Pricing of $35 Million Offering of 6.25% Convertible Subordinated Notes Due 2011.

Business Editors

HANOVER, Md.--(BUSINESS WIRE)--Jan. 16, 2004

CompuDyne Corporation (Nasdaq: CDCY), announced that it had priced its previously announced offering of $35 million principal amount of 6.25% Convertible Subordinated Notes due 2011. The underwriters have an over-allotment option to purchase an additional $5.25 million principal amount that will expire in thirty days, unless exercised prior thereto. The notes bear interest at the rate of 6.25% per annum and are convertible into shares of common stock at a conversion price of $13.89 per share. J.J.B. Hilliard, W.L. Lyons, Inc acted as sole book-running manager and Morgan Keegan & Company, Inc. and Ferris, Baker Watts, Inc acted as co-managers.

A prospectus relating to this offering may be obtained from J.J.B. Hilliard, W.L. Lyons, Inc., 501 South Fourth Avenue, Louisville, Kentucky 40202.

CompuDyne Corporation is an industry leader in sophisticated security products, integration and technology for the public security markets. "This transaction is clearly transformational for CompuDyne" said Martin Roenigk, Chairman and CEO. "It solidifies our capital base, provides long term comfort for our major government and commercial customers in a marketplace where many competitors are undercapitalized, and gives us enormous flexibility to grow our core public security sector businesses."

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.