Diversified Security Solutions Announces Financial Results for 4th Quarter and Year Ended Dec. 31, 2001.

Business/High Tech Editors

SADDLE BROOK, N.J.--(BUSINESS WIRE)--March 5, 2002

Diversified Security Solutions, Inc. (AMEX:DVS), a single-source end-to-end provider of integrated security systems, announced today financial results for the fourth quarter and year ended December 31, 2001.

Revenues for the fourth quarter ended Dec. 31, 2001, were $3,577,750 compared with $3,837,733 for the corresponding period in the prior year. Net income was $116,138, or $0.03 per share, on 3,695,380 basic weighted average common shares outstanding, compared with net income of $34,005, or $0.01 per share, on 3,000,000 basic weighted average common shares outstanding for the quarter ended Dec. 31, 2000.

DVS Chairman and Chief Executive Officer James E. Henry noted that since September 11, the Company has experienced a sharp increase in the number of inquiries for its products and services. "Of considerable interest is the fact that in the fourth quarter of 2001 alone, revenue increased 67% over revenue for the third quarter of the year," Mr. Henry stated. "Traditionally, the fourth quarter is the Company's strongest due to the rush by clients to finish projects before the year end. However, we believe that this indicates an expansion in demand after a period of slower growth due to a weakening economy in 2001.

For the full year 2001, revenues totaled $11,928,613, compared with $14,311,835 from the year before. Net income for the full year was $289,731, or $0.09 per share, on 3,268,767 basic weighted average common shares outstanding, compared with a net loss of ($60,797), or $(0.02) per share, on 3,100,000 basic weighted average common shares outstanding in 2000. The net loss and per share results for the year ended Dec. 31, 2000 reflects a one-time, non-recurring charge of $556,740, related to a previous aborted initial public offering that was postponed due to unfavorable market conditions.

"Our revenues in 2001 were affected by a slowing economy and by certain public contracts which were to have been billed in the fourth quarter but were delayed primarily as a result of the events of September 11," Mr. Henry said. "As a result, the Company's backlog of signed contracts stood at $12 million at December 31, 2001 and is expected to become revenue during the next twelve months. DVS is also currently working on several large sales opportunities which when combined with backlog should lead to increased revenue and earnings in 2002."

Fueling the Company's anticipated growth are recently awarded contracts with the Port Authority of New York and New Jersey to provide security systems, upgrades, services and maintenance for the New York Metropolitan area's three major airports, John F. Kennedy, LaGuardia and Newark; an integrated security system at the New York City Metropolitan Transportation Authority's 2 Broadway headquarters, as well as existing orders for its proprietary Mobile Digital Video Recorder (MDVR) systems on buses and trains for San Francisco Municipal and Denver Rapid Transit Authorities. "The award of these highly visible contracts to install state-of-the-art electronic surveillance and access control security systems provides a platform for the Company to broaden its reach and make important inroads with other air terminals and transit authorities around the country," Mr. Henry said. Other key customers include the New York City Transit Authority, Silverstein Properties, and the Army Air Force Exchange Services.

Diversified Security Solutions remains in a strong financial position with cash, cash equivalents and short-term marketable securities of about $9.7 million on Dec. 31, 2001, which gives it the ability to pursue larger contracts and increase revenues through potential acquisitions. In the fourth quarter 2001, DVS completed its initial public offering of 1,725,000 shares, raising net proceeds of $10,535,250, including the underwriter's over-allotment.

Diversified Security Solutions, Inc. is a single source provider of diversified technology-based integrated security solutions for commercial enterprises and governmental agencies. The Company has two operating subsidiaries focusing on the electronic security segment of the security industry: Henry Bros. Electronics, Inc. (HBE) provides integration, design, installation and support services. Viscom Products, Inc., develops, manufactures and assembles various security related products.

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. There is no assurance that the increase in inquiries about the Company's products and services or its order backlog will materialize into sales. There also is no assurance that Diversified Security Solutions will be able to further penetrate the airport and transit markets. 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 from time to time in the Company's prospectus and in filings with the U.S. Securities and Exchange Commission. We do not assume any obligation to update the forward-looking information.

                 DIVERSIFIED SECURITY SOLUTIONS, INC.

                 Consolidated Statement of Operations

           For the 3 Mos. Ended Dec. 31, For the Year  Ended Dec, 31,
                  2001       2000            2001          2000

Revenues     $ 3,577,750 $ 3,837,733    $ 11,928,613  $ 14,311,835
Operating
 Income      $   289,914 $   156,943    $    733,348  $    534,910
Net Income
  (Loss)     $   116,138 $    34,005(a) $    289,731  $    (60,797)(a)
Net  Income (Loss)
Per Share:
 Basic       $      0.03 $      0.01    $       0.09  $      (0.02)
Weighted Average
Common Shares:
Basic          3,695,380   3,000,000       3,268,767     3,100,000

(a) Net loss and per share loss for fiscal year 2000 reflects a one-time, non-recurring charge of $556,740, for a previous IPO that was postponed due to unfavorable market conditions.