Optelecom-nkf (OPTC) 8-K Optelecom-NKF Reports Third Quarter Results

Exhibit 99.1

FOR IMMEDIATE RELEASE

Optelecom-NKF Reports Third Quarter Results

Third Quarter Revenue Sets New Record

GERMANTOWN, MD/November 6, 2007/PRNewswire-FirstCall — Optelecom-NKF, Inc. (NASDAQ: OPTC), a leading global provider of advanced IP-video network solutions, today announced its financial results for the third quarter ended September 30, 2007.

The Company reported record revenue for the third quarter of $11.5 million, an increase of 13% from last year’s third quarter of $10.1 million. Operating income for the quarter ended September 30, 2007 totaled $1.5 million compared to $963 thousand for the same period last year, an increase of 59%. Net income for the quarter totaled $882 thousand, or $0.24 per fully diluted share, an increase of 123% compared to net income of $396 thousand, or $0.11 cents per fully diluted share, for the same quarter last year.

“I am pleased with our progress,” said Edmund Ludwig, President and CEO of Optelecom-NKF, Inc. “We posted good revenue growth and delivered strong operating results. We improved across the Company as we delivered superior innovative technologies that customers see as bringing great value to them.

“During the quarter we improved operations in North America, continued growing our global network of integrators and resellers, cross-sold product suites and solutions, and refined actions to boost sales and to capitalize on efficiencies. We remain solidly focused on our core strategy of profitable growth, developing the products our end-users want, driving operational enhancements, pursuing organic growth opportunities, and seeking out potential additions to our product lines.”

“Revenue and earnings for the third quarter were very strong,” commented Steve Tamburo, Optelecom-NKF’s CFO. “Operating income came in at $1.5 million, up 59% from a year ago. This also marked a significant improvement from the first two quarters of 2007. With net income for the third quarter at $0.24 per share, we regained profitability for the year as a whole.”

Third Quarter Conference Call

Optelecom-NKF President and CEO Edmund Ludwig will lead a conference call to discuss third quarter 2007 results at 10:00 a.m. Eastern Time on Wednesday, November 7, 2007.

Interested parties are welcome to call 888-396-2369 (International Dial In: 617-847-8710) shortly before the designated start time and request the “Optelecom-NKF conference call” or provide the participant number 91750659. The telephone conference call will feature a question and answer segment with management. For those parties unable to participate in the live conference call, a replay will be available from noon following the teleconference until November 14, 2007. Those wishing to listen to the replay should call 888-286-8010 (International Dial In: 617-801-6888) and enter reservation number 67182429 when prompted.

The call is being web cast and can be accessed at www.earnings.com.

About Optelecom-NKF, Inc.

Optelecom-NKF, Inc., is a global supplier of network video equipment, including video servers, Ethernet switches, fiber optic systems, and video management software. It delivers solutions for traffic management and security in airports, seaports, public transport, public space, industry parks, and buildings.

Founded in 1972, the Company’s R&D centers have accumulated extensive knowledge of fiber optic and IP/Ethernet network technologies. Optelecom-NKF supplies top-quality equipment and is committed to providing its customers with expert technical advice and support. All products are developed and tested for LAN and WAN applications.

Optelecom-NKF has offices in the US, the Netherlands, France, Spain, the UK, and Singapore, and expertise centers in the US and Europe.

Forward-Looking Statements

The statements contained in this release, which are not historical facts, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. These risks and uncertainties include, among others: the ability of the Company to realize the anticipated results of the business plan; the ability of the Company to develop and market products and communication solutions for the video surveillance, transportation, and business video markets; lack of reliable vendors, service providers, and outside products; unforeseen changes in competing technologies and products; worldwide economic variances; poor or delayed research and development results; and disparities between forecast and realized sales results. Other important factors that could cause actual results to differ materially are included but are not limited to those listed in Optelecom-NKF’s periodic reports and registration statements filed with the Securities and Exchange Commission. Optelecom-NKF does not assume any obligation to update information concerning its expectations.

OPTELECOM-NKF, INC.

INCOME STATEMENTS

FOR THE THREE MONTHS ENDED SEPTEMBER 30,

 (Dollars in Thousands, Except Per Share Amounts)

	2007			2006
Revenues	$	11,464		$	10,146
Cost of goods sold	4,441			4,059
Gross profit	7,023			6,087
Operating expenses:
Sales and marketing	2,524			2,021
Engineering	1,230			1,222
General and administrative	1,547			1,703
Amortization of intangibles	191			178
Total operating expenses	5,492			5,124
Income from operations	1,531			963
Other expense, net	(315		)	(296		)
Income before income taxes	1,216			667
Provision for income taxes	334			271
Net Income	$	882		$	396
Basic earnings per share	$	0.24		$	0.11
Diluted earnings per share	$	0.24		$	0.11
Weighted average common shares outstanding — basic	3,617			3,504
Weighted average common shares outstanding — diluted	3,621			3,531
Net income	$	882		$	396
Foreign currency translation	912			240
Comprehensive income	$	1,794		$	636

OPTELECOM-NKF, INC.

INCOME STATEMENTS

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

 (Dollars in Thousands, Except Per Share Amounts)

	2007			2006
Revenues	$	29,490		$	28,648
Cost of goods sold	12,006			12,083
Gross profit	17,484			16,565
Operating expenses:
Sales and marketing	7,234			6,017
Engineering	3,770			3,574
General and administrative	4,463			4,378
Amortization of intangibles	563			450
Total operating expenses	16,030			14,419
Income from operations	1,454			2,146
Other expense, net	(918		)	(892		)
Income before income taxes	536			1,254
Provision for income taxes	128			470
Net income	$	408		$	784
Basic earnings per share	$	0.12		$	0.23
Diluted earnings per share	$	0.12		$	0.22
Weighted average common shares outstanding — basic	3,496			3,423
Weighted average common shares outstanding — diluted	3,502			3,566
Net income	$	408		$	784
Foreign currency translation	1,340			1,476
Comprehensive income	$	1,748		$	2,260

OPTELECOM-NKF, INC.

BALANCE SHEETS

AS OF SEPTEMBER 30, 2007 AND DECEMBER 31, 2006

(Dollars in Thousands)

	2007			2006
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	3,413		$	3,571
Accounts and contracts receivable	9,305			9,222
Inventories, net	5,912			5,759
Deferred tax asset — current	678			905
Prepaid expenses and other current assets	741			1,047
Total current assets	20,049			20,504
Property and equipment, net	2,729			2,488
Deferred tax asset — non-current	1,588			1,284
Goodwill	14,785			13,678
Intangible assets, net	8,185			8,124
Other assets	200			196
TOTAL ASSETS	$	47,536		$	46,274
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	2,740		$	3,371
Accrued payroll	1,331			2,105
Bank line of credit	1,600			800
Current portion of notes payable	1,619			1,548
Other current liabilities	2,078			2,674
Total current liabilities	9,368			10,498
Notes payable	14,291			14,650
Deferred tax liability	2,134			2,102
Interest payable	1,051			788
Other liabilities	254			293
Total liabilities	27,098			28,331
STOCKHOLDERS’ EQUITY
Common stock	108			105
Additional paid-in capital	15,241			14,497
Accumulated other comprehensive income	1,910			570
Treasury stock	(1,265		)	(1,265		)
Retained earnings	4,444			4,036
Total stockholders’ equity	20,438			17,943
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	47,536		$	46,274