EMRISE Comments on Recent Order Cancellation; Reconfirms 2011 Full-Year Revenue Guidance and Outlook for Profit in Second Half of This Year

DURHAM, N.C., July 18, 2011 /PRNewswire/ -- EMRISE CORPORATION (OTCBB: EMRI), a multi-national manufacturer of defense, aerospace and industrial electronic devices and communications equipment, today said that it recently received written confirmation of the cancellation of a two-part, $1.2 million order for products to be used in an international military program, which was noted during the Company's 2011 first quarter results conference call.  EMRISE Chairman and CEO Carmine T. Oliva said despite the cancellation of the order from a major military systems integrator, EMRISE is able to reconfirm both its 2011 full-year revenue guidance of $33 to $35 million and its previously announced expectation that the Company will be profitable in the last half of this year.

The first shipment of products included in the cancelled order would have been valued at $1 million and scheduled to ship in the 2011 third quarter, with the remaining $200,000 of products expected to ship in the fourth quarter of this year.

"Due to the long delivery lead-times associated with many of our defense orders," Oliva added, "it is difficult to completely offset the effects of such a cancellation in a short period of time.  Consequently, we now expect to record a loss in this year's third quarter.  However, we have implemented an aggressive profit improvement program we believe can help minimize the impact of the cancellation, and we expect to meet our full-year revenue guidance and record a profit in this year's fourth quarter, which will result in our being profitable for the second half of 2011."

"This is our first and only such cancellation of a defense order in over a decade, and notwithstanding this unfortunate and unexpected cancellation, our backlog of deliverable orders remains strong," Oliva said.

Near the end of this year's second quarter, EMRISE and its customer agreed on the amount of cancellation charges due from the customer for cancelling the order.  The cancellation charges, which were paid in early July, offset the engineering expenses and inventory costs EMRISE had incurred on the order.

About EMRISE Corporation

EMRISE designs, manufactures and markets electronic devices, sub-systems and equipment for aerospace, defense, industrial and communications markets.  EMRISE products perform key functions such as power supply and power conversion; radio frequency (RF) and microwave signal processing; and network access and timing and synchronization of communications networks.  The use of its network products in network timing and synchronization in edge networks is a primary growth driver for the Company's Communications Equipment business segment.  The use of its power supplies, RF and microwave signal processing devices and subsystems in on-board in-flight entertainment and connectivity systems is a primary growth driver for the Company's Electronic Devices business segment. EMRISE serves the worldwide base of customers it has built in North America, Europe and Asia through operations in the United States, England and France.  EMRISE is a publicly traded company whose common stock trades on the OTCBB under the symbol EMRI.  For more information go to www.emrise.com.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

With the exception of historical information, certain matters discussed in this press release are forward looking statements within the meaning of the Private Securities Litigation Reform Act, including the expectation that full-year revenues will be $33 to $35 million, that the Company may be able to minimize the impact of the cancellation, that the Company expects to meet its full-year revenue guidance and record a profit in the fourth quarter and that the Company will be profitable in the last half of 2011. The actual future results of EMRISE could differ from those statements. The Company refers you to those factors contained in the "Risk Factors" Section of EMRISE's Annual Report on Form 10-K for the year ended December 31, 2010, Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2011, its Current Reports on Form 8-K filed in recent months, and other EMRISE filings with the SEC.

SOURCE EMRISE Corporation