ZRBA Zareba Systems (MM)

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

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.