Global ePoint Announces Strategic Initiatives For 2005

CEO Reaffirms Commitment to Growth in Homeland Security Technologies, Product Development and Strategic Agreements

CITY OF INDUSTRY — (BUSINESS WIRE) – November 29, 2004 — Global ePoint, Inc. (Nasdaq: GEPT) an innovator in homeland security solutions in the aviation law enforcement and high volume contract manufacturing, announced today its Strategic Initiatives for 2005. The announcement, by Toresa Lou, CEO of Global ePoint, reviews the Company’s key achievements of the past year and presents the Company’s vision and business goals for the coming year.

"In the past year, we successfully completed core strategic business acquisitions in our aviation and digital security divisions, and we believe we are now strongly positioned to be a major marketplace leader in electronic surveillance and data transmission technology," said Toresa Lou, CEO of Global ePoint. "Our optimism for continued growth through 2005 and beyond is predicated upon the continuing, booming demand for new and more effective solutions and products within the homeland security sector. Our proprietary products have already begun to achieve acceptance and validation by key standards–setting customers in the law enforcement and commercial marketplace, and we have continued to establish high–volume supply relationships worldwide through our contract electronics manufacturing division."

AGlobal ePoint, Inc., based in the City of Industry, California, is a vertically–integrated technology and product developer, contract manufacturer and distributor of advanced homeland security products and solutions. The Company’s operations are coordinated across three divisions: Digital Technology, which produces state–of–the–art digital video for homeland security and surveillance applications; Customized Computing Systems, which manufactures customized systems for the industrial, business and consumer markets; and AirWorks Aviation, specializing in on–board digital surveillance systems for the commercial aviation sector.

Key achievements during 2004 include:

  • Acquisition of Airworks Inc., a leading producer of digital surveillance systems for commercial and aerospace markets, including its proprietary Cockpit Door Surveillance System (CDSS). (April)
  • Acquisition of Perpetual Digital, a systems integrator and supplier of digital video recording systems for commercial and industrial security and surveillance. (April)
Positive accomplishments reported in the Company’s 3rd quarter financial results, include
  • Revenues for three months increased 29.5% over same period in previous year;
  • Revenues for nine months up 69.3% over previous year;
  • Continued integration of recent acquisitions;
  • Continued R&D investment yields new product introductions;
Strategic initiatives for 2005:

Strategic Initiative 1 – Protect and grow margins while maintaining cost–leadership through integration of R&D, manufacturing, sales and product support functions:

Global ePoint’s key operational strength is its vertical integration. The Contract Manufacturing division provides an excellent example of the Company’s effective margin protection strategies at work. In order to obtain a competitive advantage in the market place, the Company continually manages component pricing and operational costs and strives to provide scaleable, in–time production capabilities. By keeping control of all vertical functions – from design to distribution – the Company is able to effectively manage all processes from start to finish. By keeping these functions in–house, the Company is able to capture efficiencies and maintain a cost leadership advantage over our competitors. The Company also intends to follow a strategy of seeking out additional synergies and new cost saving structures across its three divisions. Manufacturing, sales and marketing and management strengths and core assets from the companies that Global ePoint has recently acquired provide the Company with significant leveraging opportunities it intends to pursue and exploit.

Strategic Initiative 2 – Horizontal product and application expansion, such as new video cameras, network security applications and access control systems:

Global ePoint is committed to building its R&D program, especially in light of technology and intellectual capital that has been incorporated to the Company through its acquisitions. The Company recently added a new business unit with the purpose of developing new technology as well as augmenting existing technology. One example of this business unit’s efforts is the development of breakthrough compression technology for next–generation digital video and Internet–protocol applications for commercial, consumer, and other security and surveillance needs.

The Company is developing proprietary Internet protocol (IP) camera for special weapons and tactics team (SWAT) surveillance operations to transmit real–time, streaming video and audio. This is a very powerful information gathering, transmitting and sharing technology in pressing demand by the nation’s diverse network of first responders, law enforcement and intelligence organizations. The Company is also active in supplying technology and products to the military and defense marketplace; it has previously announced delivery of a prototype advanced digital video recorder that is currently undergoing evaluation for use in U. S. Air Force B–1 Bombers.

Strategic Initiative 3 Expand sales, marketing and strategic partnerships to include additional applications and geographic markets:

Global ePoint is expanding its marketing and sales efforts to build brand awareness of our security products and applications across diverse and emerging market places. The Company intends to pursue strategic relationships where appropriate. It has already successfully entered the Mexican contract electronics marketplace, supplying 40,000 personal computers in the last quarter of 2003 to customers there, with continuing sales development efforts in progress. The Company is also developing initiatives to provide digital video security recorders to the Mexican banking industry, which are now required by law to be installed in banks in that country. The Company intends to continue to expand globally as demand for its higher–end PC systems grows. In addition, with demand increasing for security products, strategic alliances will help the Company gain more rapid market penetration and revenue growth.

Strategic Initiative 4 – Continue both organic growth and synergistic acquisitions.

The Company intends to continue and extend its successful track record of identifying, closing and integrating acquisitions established. Over the past two years, Global ePoint closed major acquisitions in each of the Company’s three divisions. Airworks, Inc. provided core surveillance technology integral to cockpit security in aircrafts. Perpetual Digital enabled the Digital Technology division to greatly enhance product offerings in the digital video surveillance space. The acquisition of intellectual property from Sequent Technologies, Inc. brought an extensive portfolio of proprietary technology in the design, development and manufacture of video transmission systems. The Company will continue to examine unique and complimentary technologies, but will remain careful to determine which firms offer the best and most accretive fit. Shareholder value is a top priority; the Company will never undertake an acquisition without thorough due diligence and 100% confidence in the long term effects of any acquisition on its business.

Summary

Global ePoint is enthusiastic about its early successes and the numerous milestones achieved to date. Most importantly, the Company looks forward to substantial growth in revenues, earnings and, ultimately, in shareholder value. The Company is positioned to create market momentum within the homeland security arena in order to further expand brand awareness and cultivate new strategic alliances. Global ePoint’s mission is to become the leading force in digital surveillance, homeland security and information–gathering applications, while building upon consistent revenues in contract manufacturing of personal computers and electronics.

Global ePoint’s growth catalyst, through its wholly-owned subsidiaries, is the design, manufacturing, sales and distribution of digital video surveillance systems for the law enforcement, military, aviation and homeland security markets. On the cutting edge of digital technology and seeking to expand its product line, Global ePoint is developing new compression technologies and next–generation, secure network digital video systems and servers for a wide range of new markets, concentrating primarily on security and homeland defense applications. As a solid recurring revenue stream, the Company also manufactures customized computing systems for industrial, business and consumer markets, as well as other specialized electronic products and systems. Complete vertical integration — from design and manufacturing to sales and distribution — allows the Company to capture efficiencies and maintain cost advantages in these growing markets, particularly homeland security. For more information, please visit www.globalepoint.com.

Cautionary Statement

This news release contains forward–looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward–looking statements are based on the company’s current expectations, estimates and projections, management’s beliefs and numerous assumptions, all of which are subject to change. These forward–looking statements are not guarantees of future results and are subject to numerous risks and uncertainties. Our actual results could differ materially and adversely from those expressed in any forward–looking statement. For example, deliveries may be delayed or installations canceled. Regulations may change and negatively affect demand for our products. There can be no assurance that the company’s subsidiaries and/or divisions will be able to achieve growth of sales or market share. The forward–looking statements in this release speak only as of the date of this release. We undertake no obligation to revise or update publicly any forward–looking statement for any reason. These and other risk factors are detailed in our periodic filings with the Securities and Exchange Commission.

Contact:
Global ePoint, Inc.
John Price, 909.839.1700
[email protected]