Vicon Reports Fourth Quarter and Fiscal Year 2004 Results and Purchase Of Videotronic Infosystems GmbH.

HAUPPAUGE, N.Y. -- Vicon Industries, Inc. (ASE: "VII"), a leading designer and producer of digital video management systems, today reported operating results for the fourth fiscal quarter and year ended September 30, 2004. The announcement was made by CEO Ken Darby.

For the fourth quarter, net sales were $13.4 million, compared with $13.8 million in the year ago period. A net loss of $1,487,000 ($.32 per share) was incurred, compared with a net loss of $98,000 ($.02 per share) for the same period last fiscal year.

For the 2004 fiscal year, net sales were $53.5 million compared with $52.0 million for the prior fiscal year. A net loss of $2,691,000 ($.59 per share) was incurred compared with a net loss of $4,874,000 ($1.05 per share) for the prior fiscal year. The prior year loss includes the combined effects of a goodwill write-off resulting from the adoption of a new accounting principle and a valuation allowance charge against net deferred tax assets aggregating $3.5 million or $.75 per share.

Mr. Darby said the current quarter results were impacted by lower than expected revenues, an increase of $178,000 in product development expense and additional inventory reserves of $638,000 for earlier generation product lines.

For the fiscal year 2004, U.S. sales totaled $31.2 million, up slightly from $30.9 million, while foreign sales rose to $22.3 million versus $21.1 million in fiscal 2003. Darby said delays in the introduction of new digital products hurt sales growth worldwide.

Darby also announced that Vicon recently acquired through an asset purchase Videotronic Infosystems GmbH based in Neumunster, Germany. The purchase price was approximately $1 million.

Darby said Videotronic would become part of Vicon's European unit, which has long sought a meaningful presence within the sizeable German video security market. A well regarded video supplier for 30 years, Videotronic had been operating under bankruptcy protection since June 2004. Additionally, Vicon has infused approximately $500,000 of new capital into Videotronic and over time will integrate the Vicon line of products to expand their range of product offerings.

Steffen Koenig, Videotronic's General Manager and an 18-year veteran of the Company, said, "We are delighted to become part of a world renowned video systems designer such as Vicon. With Vicon's support and access to their extensive product range, Videotronic can once again be a dominant force in the markets we serve."

Vicon Industries, Inc. designs, manufactures, assembles and markets a wide range of video systems and system components used for security, surveillance, safety and control purposes by a broad group of end users worldwide.

This news release contains forward-looking statements that involve risks and uncertainties. Statements that are not historical facts, including statements about the adequacy of reserves, estimated costs, Company intentions, probabilities, beliefs, prospects and strategies and its expectations about expansion into new markets, growth in existing markets, enhanced operating margins or growth in its business, are forward-looking statements that involve risks and uncertainties. Actual results and events may differ significantly from those discussed in the forward-looking statements and the Company undertakes no obligation to publicly update or revise any forward-looking statements.

Vicon Industries, Inc.
                       Condensed Statement of Operations

           Three Months Ended September 30,  Year Ended September 30,
           --------------------------------  ------------------------
                  2004           2003           2004          2003
                  ----           ----           ----          ----
Net sales     $13,387,000    $13,803,000    $53,533,000   $51,954,000

Gross profit    4,335,000      5,293,000     19,711,000    19,091,000

Operating
 loss          (1,314,000)      (167,000)    (2,226,000)   (1,677,000)

Loss before
 income taxes  (1,299,000)      (174,000)    (2,210,000)   (1,738,000)

Income tax
 expense
 (benefit) -
 Note 1           188,000        (76,000)       481,000     1,763,000

Loss before
 cumulative
 effect of a
 change in
 accounting
 principle     (1,487,000)       (98,000)    (2,691,000)   (3,501,000)

Cumulative
 effect of a
 change in
 accounting
 principle -
 Note 2                 -              -              -    (1,373,000)
               -----------  -------------  ------------- -------------
Net loss      $(1,487,000)    $  (98,000)   $(2,691,000)  $(4,874,000)
               ===========  =============  ============= =============

Basic and
 diluted loss
 per share:

Loss before
 cumulative
 effect of
 a change in
 accounting
 principle    $      (.32)    $     (.02)  $       (.59)   $     (.75)

Cumulative
 effect of a
 change in
 accounting
 principle    $         -     $        -   $          -    $     (.30)
                    ------        -------        -------       -------
Loss
 per share    $      (.32)    $     (.02)  $       (.59)   $    (1.05)
                    ======        =======        =======       =======
Shares used
 in computing
 basic and
 diluted loss
 per share      4,575,000      4,613,000      4,598,000     4,631,000


Note 1 - Year ended figure for 2003 includes a $2.1 million valuation
         allowance charge against net deferred tax assets.

Note 2 - Represents goodwill write-off as a result of adopting a new
         accounting principle.