MDI Announces 2006 Results and Expects "Record-Breaking" Revenues in 2007.

Current Backlog at $27 Million

SAN ANTONIO, Texas -- MDI, Inc. (NASDAQ:MDII), the leading provider of Unified Technology[TM] solutions for the security industry today announced results for the year-ended December 31, 2006.

"MDI, Inc.'s long-term vision to become a leading security solutions provider, capable of taking each tier of a complex enterprise security project, from concept to completion has been realized. Our solution is unique in that it includes products, program management and professional services in one package, direct from the manufacturer," stated J. Collier Sparks, President and CEO of MDI. "We brought together the best security talent in the industry to transform our business into a project-focused solutions organization that delivers a comprehensive suite of high-end professional services and Enterprise-Grade Software and Hardware product offerings. MDI can now provide more direct value than any other firm to accommodate the unified security needs of large enterprise organizations."

Commenting on the year end results, Mr. Sparks said, "We ended up the year with revenue of $8.72 million, which roughly equaled 2005's revenue of $8.79 million. However, backlog at the end of 2006 was $2.1 million, which was an increase of $1.2 million over 2005. We are currently filling this $2.1 million worth of orders. Looking ahead, we are excited by our near- and long-term growth prospects and believe that 2007 will represent an unprecedented year of growth and profitability for our Company."

For 2007, the Company expects revenue to be in the range of $35 million and the Company estimates earnings at $8 million. The Company bases these estimates on the following assumptions:

-- Continued sales of an estimated $8 million from our traditional
   products business in the commercial and federal government sectors,
   including the following projects which we expect to have awarded to
   us in April:
    -- A major school district in California, which will use MDI
       products to unify total security for 200 buildings including a
       state of the art IP network video system;
    -- A complete program management and professional services project
       to install MDI products for a large high-security system at an
       Army Base in the Southern United States;
    -- Unified access control and alarm management for a large
       correctional institution system in North Carolina; and
    -- Unified access control and intrusion detection systems for two
       key military bases.
-- The placement of $25 million in tasking orders by Stratis Authority
   for the design and installation of security systems under the Learn
   Safe(TM) program as committed by Stratis Authority on February 28,
   2007 in the blanket purchase order it issued to the Company.
-- Fulfillment of two tasking orders we have received from Stratis
   totaling $2,537,000 which are based on proposals previously
   submitted by MDI to Stratis which are over and above the $25
   million worth of projects described in the blanket purchase order
   issued to MDI by Stratis on February 28, 2007.
-- The funding by Stratis Authority of its January 31, 2007 $2.6
   million commitment to the Company.

Cost of sales for 2006 was $4.419 million compared to $4.627 million for 2005 and gross margins improved to 49% in 2006 compared to 47% in 2005. While selling, general and administrative expenses increased in 2006 to $10.751 million, compared to $9.495 million for 2005, the increase of $1,256 was due in large part to the non-cash stock option expense of $732 during 2006. Selling, general and administrative expenses as a percentage of revenues were 123% and 108% for the years 2006 and 2005, respectively.

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About Stratis Authority

Stratis Authority, a holding company with global operating entities reaching across multiple sectors of the physical security industry, has committed to provide the comprehensive resources necessary for MDI to continue to grow their business in execution of their long-term strategic plan, which includes a principal role in the Learn Safe program. Stratis Authority is in the business of providing high-end security, internal fraud examinations and risk assessments for corporations. Through various affiliates, Stratis also operates in the areas of complex litigation support, corporate compliance and employee screening. Gibraltar Integrity, one such Stratis affiliate, provides complex litigation support for law firms, conducts fraud investigations for banks and corporations, and helps implement anti-money laundering programs where needed. DigitEyes Corporation specializes in high-quality video systems and command center options providing another layer of security for any company. Security Imaging Systems implements the Enhanced Verification and Employee Processing System solution for corporations wanting the most technologically advanced screening processes for vendors, employees and visitors. Through these affiliations comes the strength and well rounded approach of Stratis Authority to their Learn Safe Initiative.

About Learn Safe[TM]

The Learn Safe program, developed by Stratis Authority, offers a variety of security core competencies to educational institutions across the United States. The program identifies problems faced by teachers and administrators in a format that is tailored to each locality and strives to minimize the visible infrastructure usually associated with traditional high-security systems (i.e., detectors, physical screening and armed security officers). The program's goal is to empower school administrators and teachers with an integrated suite of tools to support their current security requirements while assisting staff members in minimizing risks by identifying security threats in time to prevent future incidents. Offerings include Total Security Site Surveys (Risk Assessments, Layered Security Control, Perimeter and Barriers, Security Training), Data and Information Capture (Fully Integrated Access, Video and Intrusion Detection Systems, Video Analytics, Enterprise Scalable Security Solutions), Access and Security (ID, Credentialing, Visitor Control, People Counting), HR Solutions (Full Background & Records Checks, Fingerprint Checks, Drug Testing), Security Staffing and Local First Responder Coordination (Emergency Planning, Security Policies & Procedures). For more information on Learn Safe, please visit www.learnsafe.org.

About MDI, Inc.

MDI (NASDAQ:MDII) manufactures security technology solutions designed to protect people, facilities and assets. These solutions are unified by ONE Technology. ONE Technology unifies security point products, systems and subsystems into a common management platform. Far beyond the Integrated Security Management software promoted by industry competitors, ONE delivers an open architecture environment that adapts each individual application and device into its platform - promoting global collaboration as ONE system. The MDI product family currently protects over 8 million alarm points across the globe for many of the world's most recognized organizations including Microsoft, MBNA Worldwide, John Deere, Pepsi, FBI, TSA, Fidelity Investments, Bureau of Engraving & Printing, American Express, Department of Defense, IRS, Disney, Smithsonian Institution and MIT to name a few. For more information on MDI or its diversified line of security products, please visit www.mdisecure.com.

Forward-Looking and Cautionary Statements

Except for historical information and discussions contained herein, certain statements included in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements included in this document, other than statements of historical fact, that address activities, events or developments that management expects, believes or anticipates will or may occur in the future are forward-looking statements. These statements represent our reasonable judgment on the future based on various factors and using numerous assumptions and are subject to known and unknown risks, uncertainties and other factors that could cause our actual results and financial position to differ materially from those contemplated by the statements. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as "anticipate," "estimate," "project," "forecast," "plan," "may," "will," "should," "expect" and other words of similar meaning. Investors should not rely on forward-looking statements because they are subject to a variety of risks and uncertainties and other factors that could cause actual results to differ materially from the Company's expectation. Additional information concerning risk factors is contained from time to time in the Company's SEC filings. The Company expressly disclaims any obligation to update the information contained in this release.