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Vicon Reports Financial Results for the Third Quarter Ended June 30, 2018

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Vicon Industries, Inc. (OTCQB:VCON), a global producer of video security
solutions, today announced its financial results for its third quarter
ended June 30, 2018.

Vicon's Chief Executive Officer, Saagar Govil, said, "Current quarter
results were disappointing despite a nice margin improvement and ongoing
expense reductions. It is clear that the Company will require more time
to rebuild its market share after many years of legacy product market
deterioration. The Company believes its new product offerings will
increasingly penetrate the market as it continues to deliver on its
Valerus video management system platform enhancement roadmap. We also
recently released our second 2018 Valerus system enhancement, which
includes add-on enterprise system features as well as industry leading,
powerful video analytics capabilities."

Vicon's Chief Operating Officer, John Badke, added, "The Company
recently announced that it entered into a research and development
services agreement with its principal shareholder, Cemtrex, Inc., to
provide the Company with outsourced software development services. The
Company is transitioning its principal Israeli based software
development activities to Cemtrex's India based services group, which
has now assumed software coding and test responsibilities for the
Company. The outsourcing of these activities is expected to materially
reduce the Company's software development costs and provide development
efficiencies, which should help expedite its software roadmap. The
Company is also evaluating other restructuring measures to reduce its
operating cost profile. However, despite these initiatives, the Company
will likely require additional financing over the next twelve months to
implement its planned business objectives and strategies."

Third Quarter Fiscal 2018 Financial Results

Revenues for the third quarter of fiscal 2018 decreased 16% to $6.2
million as compared to $7.4 million in the third quarter of fiscal 2017.
The $1.2 million decrease in the current quarter included a $735,000, or
12%, decrease in sales in the Americas market and a $478,000, or 35%,
decrease in EMEA market sales. Order intake for the current quarter
decreased $966,000 to $5.9 million as compared to $6.9 million in the
third quarter of fiscal 2017. The Company continues to invest in the
promotion of its new Valerus video management system platform and
recently launched camera line offering, which is expected to ultimately
improve the Company's market competitiveness.

Gross profit margins were 42.1% for the third quarter of fiscal 2018 as
compared to 38.5% for the third quarter of fiscal 2017. The margin
improvement principally resulted from the introduction of a new and more
cost effective camera line. The Company expects to generate increasing
profit margins as it continues to enhance its software solution
capabilities.

Total operating expenses decreased slightly to $4.1 million in the
current quarter, compared to $4.1 million for the third quarter of 2017.
Subsequent to quarter end, the Company initiated software development
changes, which are expected to materially reduce its future expense and
improve throughput efficiencies.

Net loss for the third quarter of fiscal 2018 was $1.7 million, or $.09
per basic and diluted share, as compared to a net loss of $1.4 million,
or $.15 per basic and diluted share, in the third quarter of fiscal 2017.

About Vicon

Vicon Industries, Inc. (OTCQB:VCON) is a global producer of video
management systems and system components for use in security,
surveillance, safety and communication applications by a broad range of
end users. Vicon's product line consists of various elements of a video
system, including video management software, recorders and storage
devices and capture devices (cameras). Headquartered in Hauppauge, New
York, the Company also has offices in Yavne, Israel and the United
Kingdom. More information about Vicon, its products and services is
available at www.vicon-security.com.

Special Note Regarding Forward-looking Statements

This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995,
including statements relating to our new product offerings and our
proposed fundraising activities. These forward-looking statements are
based on management's current expectations and are subject to certain
risks and uncertainties that could cause actual results to differ
materially from those set forth in or implied by such forward looking
statements. These risks and uncertainties include, but are not limited
to: our history of losses and negative cash flows; our need for
additional financing; market acceptance of our products; our ability to
manufacture and develop effective products and solutions; indebtedness
to our secured lender; current and future economic conditions that may
adversely affect our business and customers; potential fluctuation of
our revenues and profitability from period to period which could result
in our failure to meet expectations; our ability to maintain adequate
levels of working capital; our ability to incentivize and retain our
current senior management team and continue to attract and retain
qualified scientific, technical and business personnel; our ability to
expand our product offerings or to develop other new products and
services; our ability to generate sales and profits from current product
offerings; rapid technological changes and new technologies that could
render certain of our products and services to be obsolete; competitors
with significantly greater financial resources; introduction of new
products and services by competitors; challenges associated with
expansion into new markets; and other factors discussed under the
heading "Risk Factors" contained in our Registration Statement on Form
S-3 filed with the Securities and Exchange Commission on January 5,
2018. All information in this press release is as of the date of the
release and we undertake no duty to update this information unless
required by law.

       

Table of Operations

Vicon Industries, Inc.

Condensed Statements of Operations

(Unaudited)

 
Three Months Ended Nine Months Ended
June 30, June 30,

2018

   

2017

2018

   

2017

Net sales $ 6,169,000 $ 7,382,000 $ 21,238,000 $ 19,991,000
Gross profit 2,601,000 2,844,000 8,559,000 7,662,000
 
Operating expenses:
Selling, general and administrative expense 2,891,000 2,887,000 9,001,000 8,369,000
Engineering and development expense 1,189,000   1,235,000   3,510,000   3,664,000  
Total operating expenses 4,080,000 4,122,000 12,511,000 12,033,000
 
Operating loss (1,479,000 ) (1,278,000 ) (3,952,000 ) (4,371,000 )
 
Loss before income taxes (1,657,000 ) (1,397,000 ) (4,426,000 ) (4,603,000 )
Income tax expense                
Net loss $ (1,657,000 )     $ (1,397,000 ) $ (4,426,000 )     $ (4,603,000 )
 

Loss per share:

Basic $ (.09 ) $ (.15 ) $ (.27 ) $ (.49 )
Diluted $ (.09 ) $ (.15 ) $ (.27 ) $ (.49 )
 

Shares used in computing loss per share:

Basic 17,553,000 9,348,000 16,413,000 9,348,000
Diluted 17,553,000 9,348,000 16,413,000 9,348,000

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