CompuDyne-Public Safety & Justice, Inc. Acquires Xanalys Investigative Software Solutions for First Responders

Xanalys provides a comprehensive suite of investigative managementand analysis solutions that enable investigators to collect, analyzeand share information and solve cases. Xanalys brings to CompuDynemore than 20 years of domain experience in the deployment of solutionsthat support the complex demands of investigation and intelligenceoperations. Its solutions are in use throughout the world by lawenforcement, homeland security and intelligence agencies in additionto leading insurance and financial organizations. Highly unique toXanalys software is its ability to search, retrieve, correlate andvisually map information from structured and unstructured informationsources such as phone records, email, letters and reports. Thisinformation can be traced back to its origins, eliminating anyquestions about data integrity.

"We see the acquisition of Xanalys as providing a powerfulextension to our current product suite and an enhancement to ourclients' investigation capabilities," said Dan Crawford, CEO ofCompuDyne-Public Safety & Justice, Inc. "Our clients now have theworld's best operational and investigation technology at theirfingertips from a single source."

"This is a terrific match of capabilities, culture and sharedgoals," said Bill Hayden, General Manager of Xanalys. "The combinedcompanies expand existing clients' capabilities while giving bothcompanies access to new clients in common markets. The timing of theagreement comes as the demands for access, analysis and informationsharing are increasing. Clients, shareholders and employees benefit onmany fronts by combining CompuDyne-Public Safety & Justice, Inc. andXanalys."

Terms of the acquisition were not disclosed.

CompuDyne-Public Safety & Justice, Inc. (CPS&J), a division ofCompuDyne Corporation, is an industry-leading provider of automatedpublic safety and justice systems which meet the demanding and complexneeds of law enforcement, fire & rescue, corrections and justiceenvironments. CPS&J has more than 350 installations supporting over1000 agencies worldwide, including San Francisco, CA; Detroit, MI;Pittsburgh, PA; and the New York Metropolitan Transportation AuthorityPolice.

Xanalys develops and markets innovative investigative managementsoftware solutions for financial, insurance, healthcare, lawenforcement, homeland security and intelligence organizations. Xanalyscombines award winning and patented software with their experience todeploy affordable solutions to address the complex demands ofinvestigation management. Xanalys' clients include Ontario ProvincialPolice, Ontario, Canada; Citigroup; The Hartford; and the IllinoisState Police.

Certain statements made in this press release constitute"forward-looking statements" within the meaning of the PrivateSecurities Litigation Reform Act of 1995, including those statementsconcerning the Company's expectations with respect to future operatingresults and other events. Although the Company believes it has areasonable basis for these forward-looking statements, thesestatements involve risks and uncertainties that cannot be predicted orquantified and consequently, actual results may differ materially fromthose expressed or implied by such forward-looking statements. Factorswhich could cause actual results to differ from expectations include,among others, capital spending patterns of the security market and thedemand for the Company's products, competitive factors and pricingpressures, changes in legislation, regulatory requirements, governmentbudget problems, the Company's ability to secure new contracts, theability to successfully grow the Company by completing acquisitions,the ability to remain in compliance with its bank covenants, delays ingovernment procurement processes, ability to obtain bid, payment andperformance bonds on various of the Company's projects, technologicalchange or difficulties, the ability to refinance debt when it becomesdue, product development risks, commercialization difficulties,adverse results in litigation, the level of product returns, theamount of remedial work needed to be performed, costs of compliancewith Sarbanes-Oxley requirements and the impact of the failure tocomply with such requirements, risks associated with internal controlweaknesses identified in complying with Section 404 of Sarbanes-Oxley,the Company's ability to simplify its structure and modify itsstrategic objectives, and general economic conditions. Risks inherentin the Company's business and with respect to future uncertainties arefurther described in its other filings with the Securities ExchangeCommission, such as the Company's Form 10-K, Form 10-Q, and Form 8-Kreports.