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Monday, April 27, 2009

EMRISE Announces Nearly $2 Million in Annualized Profit Improvement Through Companywide Program Aimed at Streamlining Operations and Reducing Cost

EMRISE Announces Nearly $2 Million in Annualized Profit Improvement Through Companywide Program Aimed at Streamlining Operations and Reducing Cost

Realignment of All Business Units Expected to Increase Efficiency Without Impacting Growth

RANCHO CUCAMONGA, Calif.--April 27 2009 --EMRISE CORPORATION (NYSE Arca:ERI), a multi-national manufacturer of defense and aerospace electronic devices and communications equipment, today announced that it has implemented a companywide program to streamline its operations and reduce costs throughout all of its operating business units in the U.S., the U.K. and France that is expected to achieve annualized cost savings approaching $2 million. The program, which includes headcount reductions and other cost saving initiatives, is designed to eliminate redundancies and increase operating efficiency in all business units, without impacting the Company’s ability to grow.

EMRISE Chairman, President and CEO Carmine T. Oliva said the Company streamlined its operations in nearly every functional area of the business including engineering, manufacturing, sales, and administrative support.

“Earlier this month, we said during our 2008 results conference call that we were in the process of making significant cost reductions at our business units as well as at the corporate level, and we have now substantially completed that process at the business unit level,” Oliva added. “It is always very difficult to see many of our valued employees have to leave, especially since they are such an important asset; however, difficult times call for difficult decisions and we have not spared anyone or any area from this top down review.

“Our fundamental business is doing well, particularly our electronic devices business which is being bolstered by defense spending in our primary force protection and terrorist interdiction product areas, as can be seen from our recent announcements of new orders,” Oliva said. “We continue to be optimistic about the expected growth rates in the defense sector for 2009, and we do not see the headcount reductions and other cost saving measures negatively affecting our ability to service our customers or to take on new business.”

EMRISE management expects there will be one-time costs of approximately $500,000 associated with the business unit headcount reductions and other cost saving initiatives, the majority of which will be recorded in the first half of 2009.

During the Company’s recent conference call, EMRISE management said that the one-time costs of headcount reductions and other cost cutting measures, along with the unfavorable impact of exchange rates would likely lead to a net loss for the first half of 2009. However, as a result of streamlining its operations and the improvements in exchange rates the Company anticipates will occur later this year, EMRISE management expects the Company to be profitable in the last half of 2009.

The Company also plans to announce overhead cost reductions at the corporate level during the second quarter of 2009. These reductions will also be significant and will further add to the nearly $2 million of profit improvement that is contemplated from the changes made at the business unit level.

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; RF and microwave signal processing; network access and timing and synchronization of communications networks. Primary growth driver applications for EMRISE products include “Radio Frequency Devices for Radio-Controlled Improvised Explosive Device Jamming Systems” and “Edge Network Timing and Synchronization” equipment. EMRISE serves customers in North America, Europe and Asia through operations in the United States, England and France. The Company has built a worldwide base of customers including a majority of the Fortune 100 in the U.S. that do business in markets served by EMRISE and many similar-size companies in Europe and Asia. 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, the matters discussed in this press release, including without limitation EMRISE’s ability to achieve annualized cost savings at a business unit level approaching $2 million, ability to eliminate redundancies and increase operating efficiency in all business units, without impacting the Company’s ability to grow or ability to streamline its operations in nearly every functional area of the business, ability for EMRISE’s business to be bolstered by defense spending in our primary force protection and terrorist interdiction product areas, ability to predict expected growth rates in the defense sector for 2009, ability to implement headcount reductions and/or other cost saving measures without negatively affecting EMRISE’s ability to service customers or to take on new business, ability to predict one time costs and/or ability to ensure that the majority of such costs will be recorded in the first half of 2009, ability to predict improvements in exchange rates later this year, ability to be profitable in the last half of 2009, ability to achieve additional overhead cost reductions at the corporate level, ability to announce such reductions and/or for such reductions to further contribute to profit improvement in 2009, are all forward-looking statements that involve a number of risks and uncertainties. The actual future results of EMRISE CORPORATION could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, unforeseen technical issues, unforeseen changes in customer demand, unforeseen delays in receipt of materials from our vendors, inability of our products to meet customer specifications, changes in the economic, industry or political climate that may negatively impact demand for our future products, and those factors contained in the “Risk Factors” Section of the Company’s Form 10-K for the year ended December 31, 2008, and other Company filings.

Contacts EMRISE CorporationJohn Donovan, 909-987-9220 ext. 3201Vice President Finance and Administrationjdonovan@emrise.comorAllen & Caron Inc.Rene Caron, 949-474-4300 (investors)rene@allencaron.comLen Hall, 949-474-4300 (media)len@allencaron.com







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