City of Chesapeake, VA Contracts With CompuDyne-Public Safety & Justice, Inc. for a Public Safety System

Business Wire, July 25, 2006

ANNAPOLIS, Md. -- CompuDyne Corporation (NASDAQ:CDCY) an industry leader in sophisticated security products, integration and technology for the public security markets, announced today that it has signed a contract to provide a new $900 thousand public safety system for the city of Chesapeake, Virginia. CompuDyne - Public Safety & Justice, Inc. (CompuDyne), formerly Tiburon, Inc., is an industry-leading provider of automated public safety and justice systems to meet the demanding and complex needs of law enforcement, fire & rescue, corrections and justice environments. This comprehensive system includes new Computer Aided Dispatch, Records Management, and Field Reporting System to support the city's public safety operations for years to come.

The Chesapeake Police Department, a longtime CompuDyne client, wanted to upgrade their existing systems to take advantage of new hardware technology and enhanced functionality. "After a thorough evaluation and rigorous demonstration process, the city selected the CompuDyne solution due to their success in implementing systems, as well as, the system's ability to meet or exceed all of our functional requirements," states Cindy Feldman, Chesapeake Police Department's Information Technology Manager. "Even though our existing CompuDyne field reporting system met state mandates and departmental requirements for paperless reporting, the new reporting system is especially impressive and user friendly. Another, factor in this award was CompuDyne's proven success in implementing a Computer Aided Dispatch system with virtually no downtime."

The new Computer Aided Dispatch (CAD) system will serve the city's police and fire departments and will allow dispatchers to respond to and manage citizen's requests for emergency services more efficiently. The CAD system operates on fully distributed Microsoft Windows(R) workstations, providing server-independent processing of all critical CAD functions and a reliable configuration approaching 100% system availability. If any component fails, the system continues to function. CompuDyne has successfully deployed this unique system architecture in several city, county, and state-wide public safety communication centers across the country

The comprehensive Records Management System (RMS) will consolidate and automate records processing and criminal investigations for the city. In addition, a comprehensive mobile communications component that includes automated report writing will be installed on approximately 275 laptops mounted in the department's vehicles.

Work has begun on this important project. CompuDyne has installed similar public safety systems throughout the Mid-Atlantic including Arlington County, Virginia; Prince George's County, Maryland; the city of Virginia Beach, Virginia; and the city of Baltimore, Maryland.

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 remain in compliance with its bank covenants, delays in government procurement processes, inability 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.