Zareba Systems Announces Fiscal Year 2009 Third Quarter and First Nine Months Results

MINNEAPOLIS--(Business Wire)--
Zareba Systems, Inc. (NASDAQ:ZRBA) today announced its results for the third
quarter and first nine months of fiscal year 2009, ended March 31, 2009. Net
sales for the third quarter of fiscal 2009 were $6.7 million, compared to net
sales of $7.0 million for the third quarter of fiscal 2008. The Company`s loss
from continuing operations was $33,000, or $0.01 per basic and diluted share,
for the third quarter of fiscal 2009 compared to loss from continuing operations
of $376,000, or $0.15 per basic and diluted share in the comparable period of
the prior year. Third quarter fiscal 2009 net income was $78,000, or $0.03 per
basic and diluted share, and included a gain on sale of the professional series
automatic gate opener product line of $111,000, or $0.04 per basic and diluted
share. Net loss was $489,000 or $0.20 per basic and diluted share for the
previous year`s third quarter.

Net sales for the first nine months of fiscal 2009 were $20.5 million, compared
to net sales of $22.4 million for the first three quarters of fiscal 2008. The
Company`s loss from continuing operations was $354,000, or $0.14 per basic and
diluted share, compared to loss from continuing operations of $959,000, or $0.39
per basic and diluted share through March 31, 2009 and 2008, respectively.
Current year nine-month results include a gain on the sale of the professional
series automatic gate opener product line, totaling $111,000, or $0.04 per basic
and diluted share. Fiscal 2008 year-to-date results include the gain on sale of
a subsidiary of $2.5 million, or $1.04 per basic and diluted share. Net loss was
$250,000, or $0.10 per basic and diluted share through nine months March 31,
2009 versus net income of $1.3 million, or $0.53 per basic and diluted share for
the same period of the prior year.

"Our third quarter results are a reflection of the resilience that our products
and customers have exhibited so far during this challenging economic period in
both of our primary markets, North America and the UK," stated President and
Chief Executive Officer Dale Nordquist. "Excluding the impact of the foreign
currency translation differences, our quarterly sales actually increased
modestly in the current year over last year."

"Our operating performance continued to improve during the quarter as well,
reflecting the cost reductions and efficiencies we have implemented throughout
the year. We have adjusted our spending and staffing levels where possible to
better align our cost structure to our business. These actions have led to a
current year-to-date improvement of our pre-tax operating results of nearly
$900,000," continued Nordquist.

"As we look ahead to the remainder of fiscal 2009 and beyond, we remain guarded
in light of the pronounced economic downturn and its potential impact on our
primary markets. We are just entering the historical peak selling season for our
products, and our fourth quarter and fiscal year 2009 results will be greatly
impacted by the reorder rates of our customers during the quarter, as they
replenish their inventories in reaction to their sell-through. Also, the
continued strength of the US dollar against the British pound sterling is
expected to result in lower reported sales and operating expenses for our UK
operations, as its sales and expenses are translated to US dollars at the lower
exchange rates." Nordquist concluded.

About Zareba Systems, Inc.

Zareba Systems, Inc., a Minnesota corporation since 1960, is the world's leading
manufacturer of electronic perimeter fence and security systems for animal and
access control. The Company's corporate headquarters is located in Minneapolis,
with manufacturing facilities in Ellendale, Minn. Its Zareba Systems Europe
subsidiary owns Rutland Electric Fencing Co., the largest manufacturer of
electric fencing products in the United Kingdom. The corporate web site is
located at www.ZarebaSystemsInc.com.

Zareba Systems, Inc.

Condensed Consolidated Operating Results
(In thousands except per share amounts) Three Months Ended Nine Months Ended
03/31/09 03/31/08 03/31/09 03/31/08
Net sales $ 6,709 $ 7,029 $ 20,530 $ 22,407
Gross profit 1,957 2,113 6,282 6,560
Income (loss) from operations 27 (382 ) (112 ) (1,008 )
Income (loss) before income taxes (119 ) (563 ) (568 ) (1,439 )
Income (loss) from continuing operations (33 ) (376 ) (354 ) (959 )
Gain (loss) from discontinued operations, net of tax - (113 ) (7 ) (283 )
Gain from sale of discontinued product line, net of tax 111 - 111 -
Gain from sale of subsidiary, net of tax - - - 2,546
Net income (loss) $ 78 $ (489 ) $ (250 ) $ 1,304

Per common and common equivalent share:
Income (loss) from continuing operations:
basic $ (0.01 ) $ (0.15 ) $ (0.14 ) $ (0.39 )
diluted $ (0.01 ) $ (0.15 ) $ (0.14 ) $ (0.39 )
Gain (loss) from discontinued operations:
basic - (0.05 ) - (0.12 )
diluted - (0.05 ) - (0.12 )
Gain from sale of discontinued product line:
basic 0.04 - 0.04 -
diluted 0.04 - 0.04 -
Gain from sale of subsidiary:
basic - - - 1.04
diluted - - - 1.04
Net income (loss) per share:
basic $ 0.03 $ (0.20 ) $ (0.10 ) $ 0.53
diluted $ 0.03 $ (0.20 ) $ (0.10 ) $ 0.53
Weighted average number of shares outstanding - basic 2,482 2,464 2,471 2,456
Weighted average number of shares outstanding - diluted 2,482 2,464 2,471 2,456

Zareba Systems, Inc.

Condensed Consolidated Balance Sheets
(In thousands) 03/31/09 06/30/08
Current Assets
* Cash and cash equivalents $ 122 $ 633
* Accounts receivable, net 4,275 8,031
* Inventories 5,639 6,083
* Other current assets 1,209 1,112
* Current assets of discontinued operations - 257
Total Current Assets 11,245 16,116
Property, plant and equipment, net 2,711 2,628
Other assets 3,232 4,304
Total Assets $ 17,188 $ 23,048
Current Liabilities
* Accounts payable $ 2,480 $ 4,282
* Accrued liabilities 1,643 2,617
* Income taxes payable - 676
* Current maturities of long-term debt 379 1,121
* Current liabilities of discontinued operations 6 172
Total Current Liabilities 4,508 8,868
Long-term debt, less current maturities 3,428 3,570
Other long-term liability 187 175
Deferred income taxes 334 685
Total Liabilities 8,457 13,298
Total Stockholders` Equity 8,731 9,750
Total Liabilities and Equity $ 17,188 $ 23,048

$

17,188

$

23,048

This release includes certain "forward-looking statements" as defined under
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. Forward-looking statements, including those relating to
the potential impact of the economic downturn, the expected impact on fourth
quarter and fiscal year 2009 results by the reorder rates of our customers
during the quarter, and our expected lower reported sales revenue and operating
expenses for our UK operations due to the continued strength of the US dollar
against the British pound sterling, are subject to risks, uncertainties and
other factors that could cause actual results to differ materially from those
stated in such statements. Such risks and uncertainties include customer
acceptance of price increases and of new products, the timing of customer
purchases, and our ability to successfully invest and explore growth
opportunities and reduce expenses, as well as the development, introduction or
acceptance of competing products, changes in technology, pricing or other
actions by competitors, and general economic conditions and currency exchange
rates.

Zareba Systems, Inc.
Jeff Mathiesen, 763-551-1125

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