RAE Systems Files Second Quarter 2008 Form 10-Q

SAN JOSE, CA, Sep 02 (MARKET WIRE) --
RAE Systems Inc. (AMEX: RAE), a leader in delivering innovative sensor
solutions to serve industrial, energy, environmental, and government
safety markets worldwide, filed its Second Quarter 2008 Form 10-Q with
the Securities and Exchange Commission on August 29, 2008, and has
returned to reporting compliance with the American Stock Exchange (AMEX).

Second Quarter 2008 Financial Results

For the second quarter of 2008, RAE Systems reported revenue of $24.7
million, compared with revenue of $20.1 million for the same quarter in
2007. For the second quarter of 2008, Americas contributed 38 percent of
total revenue, Asia contributed 45 percent and Europe contributed 17
percent. Gross margin for the quarter was 53 percent, compared with 50
percent for the second quarter of 2007. The Company reported operating
expenses for the quarter of $12.6 million compared with operating expenses
of $12.0 million for the second quarter of 2007. The increase in operating
expenses included approximately $0.7 million relating to the internal
investigation conducted under the supervision of the Audit Committee of
the Board of Directors of the Company. The Company reported a net loss
for the second quarter of 2008 of $0.5 million, or $0.01 per share,
compared with a net loss of $2.5 million, or $0.05 per share, for the
second quarter of 2007.

First Six Months 2008 Financial Results

For the first six months of 2008, RAE Systems reported revenue of $42.5
million, compared with revenue of $38.0 million for the same period in
2007. The Company reported a net loss for the first six months of 2008 of
$2.8 million, or $0.05 per share, compared with a net loss of $4.8
million, or $0.08 per share, for the first six months of 2007.

Full financial tables are available on the Form 10-Q and can be found on
the RAE Systems' Investor Relations website and the Securities and
Exchange Commission website at http://ir.raesystems.com

About RAE Systems

RAE Systems is a leading global provider of rapidly deployable sensor
networks that enable customers to identify safety and security threats in
real time. Products include multi-sensor chemical detection networks,
wireless gas detection systems and radiation monitors for energy
production and refining, industrial and environmental safety, and public
and government first responder security. RAE Systems' products are used
in over 85 countries by many of the world's leading corporations and by
many U.S. government agencies. For more information about RAE Systems,
please visit www.raesystems.com.

Safe Harbor Statement

This press release may contain "forward-looking" statements, as that term
is used in Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements include, without limitation: expressions of
"belief," "anticipation," or "expectations" of management; statements as
to industry trends or future results of operations of RAE Systems and its
subsidiaries; and other statements that are not historical fact. These
types of statements address matters that are subject to risks and
uncertainties, which could cause actual results to differ materially.
Factors that could cause or contribute to such differences include, but
are not limited to, the results of the general economic and industry
factors and receptiveness of the market to RAE Systems and its products.
In addition, our forward-looking statements should be considered in the
context of other risk factors discussed in our filings with the
Securities and Exchange Commission, including but not limited to our
annual report on Form 10-K and Form 10-Q filings, available online at
http://www.sec.gov. All forward-looking statements are based on
information available to the company on the date hereof, and the company
assumes no obligation to update such statements.

Company Contact:
Investor Relations
RAE Systems
408-952-8449
investorrelations@raesystems.com

IR Agency Contact:
Lippert/Heilshorn & Associates, Inc.
Becky Herrick
415-433-3777
bherrick@lhai.com

Copyright 2008, Market Wire, All rights reserved.

-0-