EMRISE ANNOUNCES FIRST QUARTER 2010 FINANCIAL RESULTS

EATONTOWN, NJ - May 17, 2010 - EMRISE CORPORATION (NYSE Arca: ERI), a multi-national manufacturer of defense, aerospace and industrial electronic devices and communications equipment, today announced its financial results for its first quarter ended March 31, 2010.

EMRISE Chairman and Chief Executive Officer Carmine T. Oliva said the focus of executive management throughout this year's first quarter was to work with its investment bankers to deliver on its commitment to eliminate, through the sale of assets, the Company's approximately $18.1 of its $18.3 million in total debt and Advance Control Components' ("ACC") related deferred purchase obligations. Progress on this commitment is evidenced by the first quarter sale of RO Associates, Inc. ("RO") and the elimination of its continuing losses going forward. At the same time, the Company's unit level management concentrated on generating business and building for the future in a difficult and slowly recovering economy.

On March 31, 2010, certain additional assets within the electronic devices segment were classified as assets held for sale and the financial results for those additional assets are presented as discontinued and held for sale operations for the periods reported. Additionally, as has been done in prior periods, the financial results for the Digitran division of EMRISE's wholly-owned subsidiary, EMRISE Electronics Corporation, and XCEL Japan, Ltd., both sold in March 2009, and the financial results for RO, sold March 22, 2010, are also presented as discontinued and held for sale operations for the periods reported.

"The challenges we confronted throughout last year regarding our liquidity and the complications associated with our credit facility and the economy, continued into this year's first quarter, Oliva added. "In the face of these challenges and the hurdles created by them, management and staff of our product development and sales organizations remained committed to developing new products and product enhancements, building a business pipeline and closing orders with key customers in the first quarter, which is typically our softest sales quarter of the year."

Oliva also said that the Company began to realize the full benefit of the $3 million in annualized operating expense reductions in this year's first quarter, which were the result of last year's company-wide efforts to significantly reduce operating expenses at the corporate and business unit levels. "The cost savings helped to offset the additional legal and investment banking costs associated with our efforts to sell assets to pay off our debt, additional costs from professional services related to our 2009 audit that were recorded in the first quarter and the first quarter decline in sales," Oliva added. "Because of those cost savings, we were able to achieve a year-over-year decrease in this year's first quarter loss from continuing operations, despite the higher than normal operating expenses in the quarter associated with our ongoing activities related to the sale of assets."

Key first quarter highlights included:
• Year-over-year reduction of 24% in loss from continuing operations
• Agreement on a comprehensive plan to pay off our principal lender in full
• Year over-year reduction of 16% in selling, general and administrative expenses from continuing operations
• Year-over-year decrease of 21% in cash interest expense
• Sale of substantially all the assets of RO and the elimination of its losses going forward

In January of this year, EMRISE negotiated a critical forbearance agreement related to its credit facility with its primary lender, which eliminated most of the financial covenants, reduced overall principal payments and established milestones in conjunction with the sale of a significant portion of the Company's assets.

Overall net sales from continuing operations in the 2010 first quarter were $7.1 million compared to $8.5 million in the first quarter of 2009. The year-over-year decrease in net sales reflected declines in the net sales of the Company's electronic devices subsidiaries, which were partially offset by modest increases in sales of the communications equipment subsidiaries. The sales declines in the electronic devices subsidiary were further affected by the negative impact of exchange rates between the U.S. dollar and the British pound sterling. The Company's electronic devices segment contributed approximately 63 percent of overall net sales in the 2010 first quarter, while the communications segment contributed approximately 37 percent of overall net sales.

"Despite the challenges we overcame, we need to improve sales, continue to contain costs and achieve our goal of satisfying our debt with our primary lender," Oliva said. "At that point we expect to have a much stronger balance sheet, positive working capital, significantly lower interest expense, and a Company that is focused on operating and growing its business profitably."
Overall gross profit as a percentage of sales from continuing operations was 27.5 percent in the first quarter of 2010 compared to 34.9 percent in the first quarter of 2009. The decrease in overall gross profit as a percentage of sales from continuing operations was primarily due to sales declines within the electronic devices segment and the French communications equipment subsidiary, which was partially offset by improvements within the Company's U.S. communications equipment subsidiary.

The year-over-year decrease in sales of electronic devices in this year's first quarter was due in large part to delays in the awarding of foreign military contracts as a result of global economic conditions and the completion of a large contract at one of the Company's U.K. subsidiaries in last year's first quarter. Additionally, a significant portion of the business at one of the Company's U.K. subsidiaries is transacted in U.S. dollars and was negatively impacted by exchange rate fluctuations as the subsidiary's local currency is the British pound sterling. The translation impact of exchange rates on the Company's results remains an uncertainty and could negatively or positively impact overall results in future periods.

Net sales in the communications equipment segment in this year's first quarter were up slightly compared to last year's first quarter due to a substantial increase in test equipment sales to the FAA and U.S. military by the Company's U.S. communications equipment subsidiary. This increase was largely offset by a decrease in orders and shipments for communications equipment at the Company's French subsidiary due in large part to economic impacts and spending reductions by the French Defense Ministry.

Selling, general and administrative expense (SG&A) from continuing operations in the first quarter of 2010 was $2.5 million, compared to $3 million in the first quarter of last year. The $0.5 million, or 16 percent, year-over-year decline was due primarily to significant decreases in general and administrative expense at the corporate level and at most of the Company's business units, as a result of cost reduction initiatives implemented throughout 2009.

Engineering and product development costs increased to $0.5 million in this year's first quarter from $0.4 million in the prior year first quarter due to new product development and product enhancement costs at the Company's U.S. communications equipment subsidiary.

Loss from continuing operations in the first quarter of 2010 was $1.6 million, compared to $2.1 million in the 2009 first quarter. The 2010 first quarter loss from continuing operations included an overall decline in net sales and gross profit, a loss of $0.5 million related to the sale of RO, net interest expense of $0.8 million, other income of $0.1 million, and $0.3 million of costs for professional services related to the Company's 2009 annual audit. Loss from continuing operations in last year's first quarter was $2.1 million, which included net interest expense of $1.5 million.

Net loss for the first quarter of 2010 was $1.0 million, or $0.09 loss per basic and diluted share, compared to net income of $4.8 million, or $.47 per basic and diluted share, in the first quarter of 2009. Net loss for the 2010 first quarter was impacted by declines in net sales and gross profit, and first quarter results included $0.3 million in professional services related to the Company's 2009 audit. In addition, this year's first quarter results included net income from discontinued operations of $0.7 million net of tax, which includes operating results during the quarter from discontinued operations and assets held for sale net of the loss on the sale of RO of $0.5 million. Net income for the first quarter of 2009 included income of $6.9 million net of tax that was related to the sale of the Company's Digitran and Xcel Japan operations in March 2009.

Excluding any impact from the sale of assets in the remaining quarters of 2010, EMRISE expects net income (loss) to improve in future quarters as compared to prior year quarters, due in large part to the cost reduction efforts completed in 2009, lower anticipated interest expense in future quarters due to the pay down of debt through the sale of assets, and increased sales from continuing operations that Company management believes will occur as the economy improves.

Backlog from continuing operations was $17.6 million as of March 31, 2010 compared to $15.9 million as of December 31, 2009. The increase in backlog from December 31, 2009 to March 31, 2010 is primarily due to the increase of additional orders at our U.K. RF devices subsidiary and our French communications equipment subsidiary offset by declines at our other subsidiaries. As of March 31, 2010, the backlog was approximately 91 percent related to the electronic devices segment, which tends to have long lead-times for manufacturing processes due to the custom nature of the products, and approximately 9 percent related to the communications equipment segment, which tends to deliver standard or modified standard products from stock as orders are received. Management believes that the majority of the current backlog will be shipped within the next 12 months.

As of March 31, 2010, EMRISE's cash and equivalents were $2.5 million, compared to $4.0 million at December 31, 2009. The Company owed approximately $18.3 million in total debt and ACC related deferred purchase obligations, which is down from $20.2 million at December 31, 2009. Total debt and ACC deferred purchase obligations includes a revolving credit facility, term loans, notes payable to stockholders, capital lease obligations and deferred purchase obligations associated with the Company's 2008 acquisition of ACC.

Adjusted EBITDA in this year's first quarter was $0.1 million, compared to Adjusted EBITDA of $0.9 million in last year's fist quarter.

Non-GAAP Financial Measures - Reconciliation of Adjusted EBITDA to Net Income (Loss)
This release includes Adjusted EBITDA, a non-GAAP financial measure as defined by SEC Regulation G. EMRISE defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, non-cash stock compensation, asset impairments charges, and net other income, less net gain or loss on discontinued operations. A reconciliation between net income (loss) and Adjusted EBITDA is provided in the financial tables at the end of this press release.

As of March 31, 2009, $11.9 million was outstanding under the Company's credit facility, which is due on June 30, 2010. With the help of its investment bankers, the Company is aggressively pursuing the sale of a significant portion of its assets and is also seeking to obtain partial replacement financing for the revolving portion of the credit facility, (in the form of a smaller and less costly revolving facility), with the objective to satisfy all of its current obligations to its primary lender in full. The Company believes it will be successful in paying off the credit facility by applying net proceeds from asset sales, obtaining alternate financing, or through some combination of these initiatives. However, no assurances can be provided that any of these initiatives will be successful or timely or, if successful, that they will put the Company in a position to satisfy the credit facility obligations in full or with enough remaining funds and assets for the Company to meet all of its other obligations.

If the Company is not able to repay its credit facility through the sale of assets on or prior to its maturity on June 30, 2010, fails to meet the milestones in the asset sale process as required by the credit facility, and/or cannot obtain alternate financing to replace a portion of the credit facility or to fund the Company's operations after June 30, 2010, then the Company's ability to continue operations could be materially adversely affected. Furthermore, the Company has

significant historical losses and if it is not able to attain, sustain or increase profitability on a quarterly or annual basis, then the Company may not be able to continue operations. Under any of the above scenarios, EMRISE may substantially restructure or alter its business operations and/or debt obligations, or may voluntarily seek, or be forced to seek, protection under the U.S. Bankruptcy Code. All of these circumstances raise substantial doubt as to the Company's ability to continue as a going concern.

Conference Call and Webcast
A conference call with EMRISE management is scheduled for 9:00 a.m. EDT (8:30 a.m. PDT) on Tuesday, May 18, 2010 to discuss the Company's unaudited financial results for its first quarter ended March 31, 2010. To join the call, dial toll-free (877) 941-2322 five minutes prior to scheduled start time. For callers outside the United States, dial +1 (480) 629-9715. A live webcast of the call may also be accessed at www.emrise.com; on the EMRISE client page at www.allencaron.com; or at http://viavid.net/dce.aspx?sid=00007589; or. An archived replay of the webcast will be available shortly after the call through the same web links listed above and will be available for 90 days.

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; radio frequency (RF) and microwave signal processing; and network access and timing and synchronization of communications networks. Primary growth driver applications for EMRISE products include the use of its RF devices in radio-controlled improvised explosive device (RCIED) jamming systems, and the use of its Network Timing and Synchronization products in edge networks. 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, the sale of assets required by the credit facility and meeting the milestones related thereto, the payment in full of the credit facility, ability to ship the majority of backlog in the next 12 months, the future effect of the global economic crisis and exchange rates, the ability of the Company to improve sales, continue to contain costs and satisfy debt with its primary lender and the ability to achieve a much stronger balance sheet, positive working capital, significantly lower interest expense as a result, ability to grow its business profitably, and the ability to increase sales from continuing operations or to improve net income (loss) from continuing operations in future quarters as compared to prior year quarters are all forward looking statements. The actual future results of EMRISE could differ from those statements. Factors that could cause or contribute to such differences include, but are not limited to, failure to successfully market and negotiate the sale of the assets to be sold under the credit facility; the failure to meet one or more of the milestones related to such sales or some other default under the credit facility; failure to satisfy all obligations under or replace the credit facility by June 30, 2010; an deterioration of liquidity or failure to meet working capital needs that causes supply interruptions or delays in shipments to customers; delays in working capital advances under the credit facility's revolving loan due to actions of the primary lender's receiver or otherwise; cost reductions do not result in the anticipated level of cost savings or cost reductions have to be reversed to meet operating needs; whether the global economic recession will have a further or deeper negative impact on our customers, vendors or suppliers that has a negative impact on our ability to ship backlog, increase sales or meet our sales forecasts; inability to develop new products or grow sales; unexpected costs, cost increases or lack of expected savings that affect the future profitability of EMRISE; inability to support the required development of new or existing products; unexpected delays, or additional delays as may be experienced by EMRISE customers, vendors or other circumstances which prevent timely shipment of current or future orders as expected; and those factors contained in the "Risk Factors" Section of EMRISE's Form 10-K for the year ended December 31, 2009 and other EMRISE filings with the U.S. Securities and Exchange Commission.