##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

(Mark One)


|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2003

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|[   ] |  | Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission file number: 0-9463

AMERICAN BUILDING CONTROL, INC.

(Exact name of registrant as specified in its charter)


|                                                                                   |  |                                                 
|---------------------------------------------------------------------------------- |  | ------------------------------------------------
|DELAWARE
(State or other jurisdiction
Of incorporation or organization)            |  | 75-2626358
(I.R.S. Employer
Identification 
No.)
|                                                                                   |  |                                                 
|1301 WATERS RIDGE DRIVE
LEWISVILLE, TEXAS
(Address of principal executive offices) |  | 75057
(Zip Code)                                

Registrants telephone number, including area code: (972) 353-6458

Securities registered pursuant to Section 12(b) of the Act: NONE

Securities registered pursuant to Section 12(g) of the Act:

COMMON STOCK, $.01 PAR VALUE

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [   ]

As of April 30, 2003, 14,204,071 shares of the Registrants Common Stock were
outstanding.





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TABLE OF CONTENTS



|                                                  |                                                                                               |  |  |  |  |  |  | 
|------------------------------------------------- | --------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|Forward Looking Statements                       
|PART I                                           
|                                                  | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                                                  | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                                  | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                                                  | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II                                          
|                                                  | ITEM 1. LEGAL PROCEEDINGS                                                                    
|                                                  | ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                            
|                                                  | ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                      
|                                                  | ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                  
|                                                  | ITEM 5. OTHER INFORMATION                                                                    
|                                                  | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                                       
|CERTIFICATION                                    
|EX-99.1 Certification-Principal Executive Officer
|EX-99.2 Certification-Principal Financial Officer



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##### Table of Contents



AMERICAN BUILDING CONTROL, INC.
FORM 10-Q
TABLE OF CONTENTS

|                               |   |                                                                                       |  |   
|------------------------------ | - | ------------------------------------------------------------------------------------- |  | --
|                               |   | Page                                                                                 
|                               |   |                                                                                      
|FORWARD LOOKING STATEMENTS     |   | ii                                                                                   
|PART
I - FINANCIAL INFORMATION |   | 1                                                                                    
|ITEM 1                         | : | FINANCIAL STATEMENTS                                                                  |  | 1 
|ITEM 2                         | : | MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS |  | 16
|ITEM 3                         | : | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            |  | 19
|ITEM 4                         | : | CONTROLS AND PROCEDURES                                                               |  | 19
|PART
II - OTHER INFORMATION    |   | 20                                                                                   
|ITEM 1                         | : | LEGAL PROCEEDINGS                                                                     |  | 20
|ITEM 2                         | : | CHANGES IN SECURITIES AND USE OF PROCEEDS                                             |  | 20
|ITEM 3                         | : | DEFAULTS UPON SENIOR SECURITIES                                                       |  | 20
|ITEM 4                         | : | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   |  | 20
|ITEM 5                         | : | OTHER INFORMATION                                                                     |  | 20
|ITEM 6                         | : | EXHIBITS AND REPORTS ON FORM 8-K                                                      |  | 20
|SIGNATURES                     |   | 21                                                                                   
|CERTIFICATIONS                 |   | 22                                                                                   

i



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Forward Looking Statements



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain statements contained or incorporated in this quarterly report on
Form 10-Q, which are not statements of historical fact, constitute forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 (the Reform Act). Forward looking statements are made in
good faith by American Building Control, Inc. (the Company) pursuant to the
safe harbor provisions of the Reform Act. These statements may involve
known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements to differ materially from any
future results, performance or achievements, whether expressed or implied.
These risks, uncertainties and factors include the timely development and
acceptance of new products and services, the impact of competitive pricing,
fluctuations in operating results, the ability to introduce new products and
services, technological changes, reliance on intellectual property and other
risks. The objectives set forth in this Form 10-Q are subject to change due
to global market and economic conditions beyond the control of the Company.

ii



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PART I




ITEM 1. FINANCIAL STATEMENTS

AMERICAN BUILDING CONTROL, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

|                            |                                                                      |                      |       |           |        |              |        |        |        | 
|--------------------------- | -------------------------------------------------------------------- | -------------------- | ----- | --------- | ------ | ------------ | ------ | ------ | ------ | 
|                            |                                                                      |                      |       | March 31, |        | December 31,
|                            |                                                                      |                      |       | 2003      |        | 2002        
|                            |                                                                      |                      |       |           |        |             
|ASSETS                      |                                                                      |                      |       |           |        |              |        |       
|Current Assets:             |                                                                      |                      |       |           |        |              |        |       
|                            | Cash and cash equivalents                                            |                      | $     | 12,379    |        |              | $      | 16,436 |       
|                            | Trade accounts receivable, net                                       |                      |       | 5,463     |        |              |        | 4,955  |       
|                            | Inventories                                                          |                      |       | 5,426     |        |              |        | 4,357  |       
|                            | Receivable from Honeywell International, Inc. - current portion      |                      |       | 3,600     |        |              |        | 3,600  |       
|                            | Prepaid expenses and other current assets                            |                      |       | 1,129     |        |              |        | 1,165  |       
|                            | Net current assets of discontinued operations                        |                      |       | 1,716     |        |              |        | 1,833  |       
|                            |                                                                      |                      |       |           |        |              |        |       
|                            |                                                                      | Total current assets |       |           | 29,713 |              |        |        | 32,346 | 
|Property and Equipment, net |                                                                      |                      | 9,964 |           |        |              | 10,518 |       
|Other Assets:               |                                                                      |                      |       |           |        |              |        |       
|                            | Goodwill, net                                                        |                      |       | 5,228     |        |              |        | 5,332  |       
|                            | Other intangible assets, net                                         |                      |       | 259       |        |              |        | 330    |       
|                            | Receivable from Honeywell International, Inc. - less current portion |                      |       | 1,800     |        |              |        | 1,800  |       
|                            | Other assets                                                         |                      |       | 290       |        |              |        | 290    |       
|                            |                                                                      |                      |       |           |        |              |        |       
|                            |                                                                      | Total assets         |       | $         | 47,254 |              |        | $      | 50,616 | 
|                            |                                                                      |                      |       |           |        |              |        |       

The accompanying notes are an integral part of the consolidated financial statements.

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AMERICAN BUILDING CONTROL, INC. and SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |              |       |        |        | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------- | --------------------------- | ------------------------------------------ | ----- | --------- | ------ | ------------ | ----- | ------ | ------ | 
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       | March 31, |        | December 31,
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       | 2003      |        | 2002        
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |             
|LIABILITIES AND STOCKHOLDERS EQUITY |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |             
|Current Liabilities:                 |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |             
|                                     |                                                                                                                                                                         | Trade accounts payable                             |                             | $                                          | 4,525 |           |        | $            | 3,201 |       
|                                     |                                                                                                                                                                         | Accrued expenses                                   |                             |                                            | 2,215 |           |        |              | 4,068 |       
|                                     |                                                                                                                                                                         | Accrued compensation                               |                             |                                            | 1,885 |           |        |              | 1,556 |       
|                                     |                                                                                                                                                                         | Royalty claim on assignment agreement              |                             |                                            | 721   |           |        |              | 715   |       
|                                     |                                                                                                                                                                         | Severance - current portion                        |                             |                                            | 505   |           |        |              | 792   |       
|                                     |                                                                                                                                                                         | Other current liabilities                          |                             |                                            | 1,250 |           |        |              | 1,115 |       
|                                     |                                                                                                                                                                         | Deferred income - current portion                  |                             |                                            | 1,004 |           |        |              | 1,038 |       
|                                     |                                                                                                                                                                         | Net current liabilities of discontinued operations |                             |                                            | 1,862 |           |        |              | 2,145 |       
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |              |       |       
|                                     |                                                                                                                                                                         |                                                    | Total current liabilities   |                                            |       | 13,967    |        |              |       | 14,630 |       
|Long-Term Liabilities                |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |             
|                                     |                                                                                                                                                                         | Financing obligation                               |                             |                                            | 6,600 |           |        |              | 6,600 |       
|                                     |                                                                                                                                                                         | Deferred income - less current portion             |                             |                                            | 1,038 |           |        |              | 1,038 |       
|                                     |                                                                                                                                                                         | Severance - less current portion                   |                             |                                            | 914   |           |        |              | 914   |       
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |              |       |       
|                                     |                                                                                                                                                                         |                                                    | Total long-term liabilities |                                            |       | 8,552     |        |              |       | 8,552  |       
|Commitments and Contingencies        |                                                                                                                                                                         |                                                    |                            |                                            |       |           |       |             
|Stockholders Equity:                |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |             
|                                     | Preferred stock, $5 par value, issuable in series; 2,000,000 shares
authorized; Series A, 12% cumulative convertible;
195,351 shares authorized, issued and outstanding |                                                    |                             | 977                                        |       |           |        | 977          |      
|                                     | Common stock, $.01 par value; 50,000,000 shares authorized;
17,494,238 shares issued                                                                                    |                                                    |                             | 175                                        |       |           |        | 175          |      
|                                     | Additional paid-in-capital                                                                                                                                              |                                                    |                             | 162,269                                    |       |           |        | 162,269      |      
|                                     | Accumulated deficit                                                                                                                                                     |                                                    |                             | (100,040                                   | )     |           |        | (97,354      | )    
|                                     | Accumulated
other comprehensive income                                                                                                                                  |                                                    |                             | 43                                         |       |           |        | 50           |      
|                                     | Treasury stock at cost (3,473,750 and 3,467,650 common shares
at March 31, 2003 and December 31, 2002)                                                                  |                                                    |                             | (38,689                                    | )     |           |        | (38,683      | )    
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |              |       |       
|                                     |                                                                                                                                                                         |                                                    |                             | Total stockholders equity                 |       |           | 24,735 |              |       |        | 27,434 | 
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |              |       |       
|                                     |                                                                                                                                                                         |                                                    |                             | Total liabilities and stockholders equity |       | $         | 47,254 |              |       | $      | 50,616 | 
|                                     |                                                                                                                                                                         |                                                    |                             |                                            |       |           |        |              |       |       

The accompanying notes are an integral part of the consolidated financial statements.

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AMERICAN BUILDING CONTROL, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS


(in thousands, except share data)


|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |         |       |         |            | 
|---------------------------------------------------------------- | ---------------------------------------------------------------- | ----------------------------------- | ------------------------------------------------------------------------------ | ------- | ----- | ---------------------------- | ---------- | ------- | ----- | ------- | ---------- | 
|                                                                 |                                                                  |                                     |                                                                                |         |       | Three months ended March 31,
|                                                                 |                                                                  |                                     |                                                                                |         |       |                             
|                                                                 |                                                                  |                                     |                                                                                |         |       | 2003                         |            | 2002   
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|Net sales                                                        |                                                                  | $                                   | 11,395                                                                         |         |       | $                            | 9,771      |        
|Cost of sales (exclusive of depreciation shown seperately below) |                                                                  |                                     | 7,772                                                                          |         |       |                              | 6,869      |        
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Gross profit                                                                   |         |       | 3,623                        |            |         |       | 2,902   |           
|Other operating costs:                                           |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  | Selling, general and administrative |                                                                                |         | 4,874 |                              |            |         | 4,349 |        
|                                                                 |                                                                  | Depreciation and amortization       |                                                                                |         | 504   |                              |            |         | 636   |        
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | 5,378                                                                          |         |       |                              | 4,985      |        
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Operating loss                                                                 |         |       | (1,755                       | )          |         |       | (2,083  | )         
|Other income (expense):                                          |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 | Interest expense                                                 |                                     |                                                                                | (299    | )     |                              |            | (800    | )    
|                                                                 | Interest income                                                  |                                     |                                                                                | 19      |       |                              |            | 2       |      
|                                                                 | Other, net                                                       |                                     |                                                                                | 38      |       |                              |            | 35      |      
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | (242                                                                           | )       |       |                              | (763       | )      
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Loss before discontinued operations
and cumulative effect of accounting change |         |       | (1,997                       | )          |         |       | (2,846  | )         
|                                                                 |                                                                  |                                     | Income (loss) from discontinued operations, net of tax benefit of $429 in 2002 |         |       | (664                         | )          |         |       | 1,620   |           
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Loss before cumulative effect of accounting change                             |         |       | (2,661                       | )          |         |       | (1,226  | )         
|Cumulative effect of accounting change:                          |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 | Cumulative effect of accounting change - continuing operations   |                                     |                                                                                |        |       |                              |            | (14,762 | )    
|                                                                 | Cumulative effect of accounting change - discontinued operations |                                     |                                                                                |        |       |                              |            | (11,353 | )    
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Net loss                                                                       |         |       | (2,661                       | )          |         |       | (27,341 | )         
|Dividend requirements on preferred stock                         |                                                                  |                                     | (29                                                                            | )       |       |                              | (29        | )      
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Net loss allocable to common stockholders                                      |         | $     | (2,690                       | )          |         | $     | (27,370 | )         
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|Basic and diluted earnings (loss) per share                      |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Continuing operations                                                          |         | $     | (0.14                        | )          |         | $     | (0.20   | )         
|                                                                 |                                                                  |                                     | Discontinued operations earnings (loss) per share                              |         |       | (0.05                        | )          |         |       | 0.12    |           
|                                                                 |                                                                  |                                     | Cumulative effect of accounting change  - continuing operations                |         |       |                             |            |         |       | (1.05   | )         
|                                                                 |                                                                  |                                     | Cumulative effect of accounting change  - discontinued operations              |         |       |                             |            |         |       | (0.81   | )         
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Adjusted basic loss per share                                                  |         | $     | (0.19                        | )          |         | $     | (1.95   | )         
|                                                                 |                                                                  |                                     |                                                                                |         |       |                              |            |        
|                                                                 |                                                                  |                                     | Number of common shares used in computations:                                  |         |       |                              |            |         |       |         |           
|                                                                 |                                                                  |                                     |                                                                                | Basic   |       |                              | 14,040,488 |         |       |         | 14,046,588 | 
|                                                                 |                                                                  |                                     |                                                                                | Diluted |       |                              | 14,040,488 |         |       |         | 14,046,588 | 

The accompanying notes are an integral part of the consolidated financial statements.

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AMERICAN BUILDING CONTROL, INC. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS


(in thousands)


|                                                                                          |                                                     |              |         |                              |     |      |          |        |     | 
|----------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------ | ------- | ---------------------------- | --- | ---- | -------- | ------ | --- | 
|                                                                                          |                                                     |              |         | Three months ended March 31,
|                                                                                          |                                                     |              |         |                             
|                                                                                          |                                                     |              |         | 2003                         |     | 2002
|                                                                                          |                                                     |              |         |                              |     |     
|Operating Activities:                                                                     |                                                     |              |         |                              |     |      |          |       
|Net loss                                                                                  |                                                     |              | ($2,661 | )                            |     |      | ($27,341 | )     
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                     |              |         |                              |     |      |          |       
|                                                                                          | Cumulative effect of accounting change              |              |         |                             |     |      |          | 26,115 |    
|                                                                                          | Loss on disposal of fixed assets                    |              |         | 154                          |     |      |          | 10     |    
|                                                                                          | Depreciation and amortization                       |              |         | 569                          |     |      |          | 859    |    
|                                                                                          | Provision for losses on accounts receivable         |              |         | 96                           |     |      |          | (116   | )  
|                                                                                          | Mark-to-market interest rate swap                   |              |         | 39                           |     |      |          | (55    | )  
|Changes in operating assets and liabilities:                                              |                                                     |              |         |                              |     |      |          |       
|                                                                                          | Trade accounts receivable                           |              |         | (602                         | )   |      |          | (132   | )  
|                                                                                          | Inventories                                         |              |         | (1,072                       | )   |      |          | 2,690  |    
|                                                                                          | Prepaid and other current assets                    |              |         | 131                          |     |      |          | 826    |    
|                                                                                          | Other assets                                        |              |         | 71                           |     |      |          | 242    |    
|                                                                                          | Trade accounts payable                              |              |         | 1,511                        |     |      |          | 713    |    
|                                                                                          | Accrued and other current liabilities               |              |         | (2,109                       | )   |      |          | (286   | )  
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|                                                                                          | Net cash provided by (used in) operating activities |              |         | (3,873                       | )   |      |          | 3,525  |    
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|Investing Activities:                                                                     |                                                     |              |         |                              |     |      |          |       
|Purchases of property and equipment                                                       |                                                     |              | (258    | )                            |     |      | (29      | )     
|Proceeds received from sales of property and equipment                                    |                                                     |              | 103     |                              |     |      |         |       
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|                                                                                          | Net cash used in investing activities               |              |         | (155                         | )   |      |          | (29    | )  
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|Financing Activities:                                                                     |                                                     |              |         |                              |     |      |          |       
|Net repayments on revolving line of credit                                                |                                                     |              |        |                              |     |      | (3,127   | )     
|Repayments on other debt                                                                  |                                                     |              |        |                              |     |      | (59      | )     
|Purchases of treasury stock                                                               |                                                     |              | (6      | )                            |     |      |         |       
|Payment of preferred stock dividends                                                      |                                                     |              | (29     | )                            |     |      | (29      | )     
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|                                                                                          | Net cash used in financing activities               |              |         | (35                          | )   |      |          | (3,215 | )  
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|Net increase (decrease) in cash and cash equivalents                                      |                                                     |              | (4,063  | )                            |     |      | 281      |       
|Effect of exchange rate changes on cash                                                   |                                                     |              | 6       |                              |     |      | 28       |       
|Cash and cash equivalents, beginning of year                                              |                                                     |              | 16,436  |                              |     |      | 3,300    |       
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|Cash and cash equivalents, end of year                                                    |                                                     | $            | 12,379  |                              |     | $    | 3,609    |       
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|Supplemental cash flow information:                                                       |                                                     |              |         |                              |     |      |          |       
|                                                                                          | Cash paid during the year for:                      |              |         |                              |     |      |          |        |    
|                                                                                          |                                                     | Interest     |         | $                            | 231 |      |          | $      | 472 | 
|                                                                                          |                                                     |              |         |                              |     |      |          |       
|                                                                                          |                                                     | Income taxes |         | $                            | 17  |      |          | $      | 3   | 
|                                                                                          |                                                     |              |         |                              |     |      |          |       

The accompanying notes are an integral part of the consolidated financial statements.

4



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American Building Control, Inc.

Notes to Consolidated Financial Statements

Note 1: Nature of Operations



| |                      
| | ---------------------
| | Basis of Presentation



| |                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------
| | The accompanying financial statements have been derived from the
accounts of American Building Control, Inc. and its subsidiaries (the
Company).



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The interim financial statements are prepared on an unaudited basis in
accordance with accounting principles for interim reporting and do not
include all of the information and disclosures required by accounting
principles generally accepted in the United States of America for complete
financial statements. All adjustments which are, in the opinion of
management, necessary for a fair presentation of the results of operations
for the interim periods have been made and are of a recurring nature unless
otherwise disclosed herein. The results of operations for such interim
periods are not necessarily indicative of results of operations for a full
year. For further information, refer to the consolidated financial statements
and notes to the consolidated financial statements for the year ended
December 31, 2002 included in the Companys Annual Report on Form 10-K.



| |                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On December 20, 2002, the Company sold its closed-circuit television
(CCTV) business to Honeywell International, Inc. (Honeywell) for $36
million, subject to post-closing adjustments plus the transfer of certain
liabilities (Honeywell Asset Sale). The financial statements have been
restated to reflect the CCTV business as discontinued operations for all
periods presented.



| |                     
| | --------------------
| | Nature of Operations



| |                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Following the Honeywell Asset Sale, the Company, which is headquartered
in Lewisville, Texas, is focused on designing, marketing, selling and
servicing specialty security products in industrial, governmental and
consumer surveillance markets worldwide. The Company also has a small
operation based in Switzerland.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company has two operating segments: the Professional Security Group
(PSG), whose primary focus is access control products, and the Diversified
Sales Group (DSG) which markets products to the consumer/ do-it-yourself
business as well as its industrial video and alarm management businesses. A
third segment, Corporate, provides human resources, legal, financial,
information technologies, accounting and reporting functions.



| |                            
| | ---------------------------
| | Principles of Consolidation



| |                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consolidated financial statements include the accounts of American
Building Control, Inc. (formerly known as Ultrak, Inc.), a Delaware
corporation, and its wholly-owned subsidiaries. These companies are
collectively referred to as the Company.



| |                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Local currencies are considered the functional currencies for the
Companys operations outside the United States. Assets and liabilities are
translated into U.S. Dollars at the rate of exchange in effect at the balance
sheet date. Revenues and expenses are translated into U.S. Dollars at the
average monthly exchange rates prevailing during the year.



| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | All significant inter-company balances and transactions have been
eliminated in consolidation.

5



---



##### Table of Contents





| |                         
| | ------------------------
| | Stock-Based Compensation



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In December 2002, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 148, Accounting for Stock-Based
CompensationTransition and Disclosurean amendment of FASB Statement No.
123.This statement amends SFAS No. 123, Accounting for Stock-Based
Compensation,to provide alternative methods of transition for a voluntary
change to the fair value based method of accounting for stock-based employee
compensation. In addition, this statement amends the disclosure requirements
of SFAS No. 123 to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-based employee
compensation and the effect of the method used on reported results.



| |                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company accounts for stock-based compensation to employees using the
intrinsic value method. Compensation costs for stock options is measured as
the excess, if any, of the quoted market price of the Companys stock at the
date of grant over the amount an employee must pay to acquire the stock. The
Company has adopted the disclosure-only provisions of SFAS No. 123,
Accounting for Stock-Based Compensation.



| |                     
| | --------------------
| | Compensation Expense



| |                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Option prices are equal to the market price at the date of grant. Shares
under grant generally become exercisable in three equal annual installments
beginning one year after the date of grant and expire after ten years. The
Honeywell Asset Sale triggered the change of control provisions in the
Companys stock option plans that provided for the immediate vesting of all
outstanding stock options as of December 20, 2002.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | No compensation cost is reflected in operations as all options granted
under the Companys option plans had an exercise price equal to the market
value of the underlying common stock on the date of grant. The following
table illustrates the effect on operations and per share data as if the
Company had applied the fair value recognition provisions of SFAS No. 123 to
employee stock-based compensation (in thousands):

6



---



##### Table of Contents



|                                                                                                                    |                                                                                                                 |  |                              |  |  |  |      |        |      |  |   |        |  
|------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- |  | ---------------------------- |  |  |  | ---- | ------ | ---- |  | - | ------ | -
|                                                                                                                    |                                                                                                                 |  | Three months ended March 31,
|                                                                                                                    |                                                                                                                 |  |                             
|                                                                                                                    |                                                                                                                 |  |                              |  |  |  | 2003 |        | 2002
|                                                                                                                    |                                                                                                                 |  |                              |  |  |  |      |        |     
|Net loss from continuing operations before cumulative
effect of accounting change allocable to common
stockholders: |                                                                                                                 |  |                              |  |  |  |      |        |      |  |   |       
|                                                                                                                    | As reported                                                                                                     |  |                              |  |  |  | $    | (2,026 | )    |  | $ | (2,875 | )
|                                                                                                                    | Deduct: Total stock-based compensation under fair value
based method for all awards, net of related tax expense |  |                              |  |  |  |      |       |      |  |   | (232   | )
|                                                                                                                    |                                                                                                                 |  |                              |  |  |  |      |        |      |  |   |        |  
|                                                                                                                    | Pro forma                                                                                                       |  |                              |  |  |  | $    | (2,026 | )    |  | $ | (3,107 | )
|                                                                                                                    |                                                                                                                 |  |                              |  |  |  |      |        |      |  |   |        |  
|Basic and diluted loss per share from continuing operations
before cumulative effect of accounting change           |                                                                                                                 |  |                              |  |  |  |      |        |      |  |   |       
|                                                                                                                    | As reported                                                                                                     |  |                              |  |  |  |      | ($0.14 | )    |  |   | ($0.20 | )
|                                                                                                                    | Pro forma                                                                                                       |  |                              |  |  |  |      | ($0.14 | )    |  |   | ($0.22 | )



| |                                                                                                                                                                                                                                                                                                                                               
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The fair value of these options was estimated at the date of grant using
the Black-Scholes option pricing model with the following weighted-average
assumptions: expected volatility of a range of 55 to 80 percent; risk-free
interest rates of ranging from 4.5 to 6.5 percent; no dividend yield; and
expected lives of one to seven years.



| |                  
| | -----------------
| | Warranty Reserves



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Reserves are provided for the estimated warranty costs when revenue is
recognized. The costs of warranty obligations are estimated based on warranty
policy or applicable contractual warranty, historical experience of known
product failure rates and use of materials and service delivery charges
incurred in correcting product failures. Specific warranty accruals may be
made if unforeseen technical problems arise. If actual experience, relative
to these factors, adversely differs from these estimates, additional warranty
expense may be required.



| |                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------
| | The table below shows the rollforward of warranty accrual for the three
months ended March 31, 2003 and 2002 (in thousands):

|                   |  |                              |  |  |  |      |     |      |  |   |    |  |  |  |  | 
|------------------ |  | ---------------------------- |  |  |  | ---- | --- | ---- |  | - | -- |  |  |  |  | 
|                   |  | Three months ended March 31,
|                   |  |                             
|                   |  |                              |  |  |  | 2003 |     | 2002 |  |   |    | 
|                   |  |                              |  |  |  |      |     |      |  |   |    | 
|Begining balance   |  |                              |  |  |  | $    | 128 |      |  | $ | 63 | 
|Charged to expense |  |                              |  |  |  |      | 16  |      |  |   | 16 | 
|Usage              |  |                              |  |  |  |      | (1  | )    |  |   |   | 
|                   |  |                              |  |  |  |      |     |      |  |   |    | 
|Closing balance    |  |                              |  |  |  | $    | 143 |      |  | $ | 79 | 
|                   |  |                              |  |  |  |      |     |      |  |   |    | 



| |                  
| | -----------------
| | Reclassifications



| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | Certain amounts have been reclassified in the prior period financial
statements to conform to the current period presentation.

7



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##### Table of Contents



Note 2: Receivable from Honeywell International, Inc.



| |                                                                                                                                                                                                                                                                                                                                                                                                                          
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On December 20, 2002, the Company consummated the sale of assets and
liabilities related to the closed-circuit television (CCTV) business (the
CCTV Business) to Honeywell International, Inc. (Honeywell) for $36.0
million (the Honeywell Asset Sale or Asset Purchase Agreement). At
December 31, 2002, the Company had a receivable of $5.4 million from
Honeywell resulting from the Honeywell Asset Sale.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The $5.4 million receivable will be paid to the Company in three equal
installments, every six months beginning in May 2003, less any claims or
purchase price adjustments resulting from changes to the proposed closing
balance sheet provided to Honeywell in March 2003. Adjustments to the
purchase price are based on the difference between the final closing balance
sheet and $28,389,000. On March 10, the Company submitted a proposed closing
balance sheet that increased the purchase price by about $3.8 million. On
April 9, Honeywell has challenged the proposed closing balance sheet and
proposed a reduction in the purchase price of about $2.6 million.



| |                                                                                                                                                                                                                                                                                                                                                           
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | As of April 24, the Company and Honeywell did not resolve their
differences. Pursuant to the terms of the Asset Purchase Agreement, the
Company and Honeywell have begun the process of selecting a nationally
recognized accounting firm to render a binding decision on the dispute. A
final resolution is not expected until the third quarter of 2003.

Note 3: Trade Accounts Receivable



| |                                                                          
| | -------------------------------------------------------------------------
| | Supplemental information on net trade accounts receivable (in
thousands):

|                                      |  |           |       |              |  |   |       |  
|------------------------------------- |  | --------- | ----- | ------------ |  | - | ----- | -
|                                      |  | March 31, |       | December 31,
|                                      |  | 2003      |       | 2002        
|                                      |  |           |       |             
|Gross trade accounts receivable       |  | $         | 5,782 |              |  | $ | 5,357 |  
|Less: allowance for doubtful accounts |  |           | (319  | )            |  |   | (402  | )
|                                      |  |           |       |              |  |   |       |  
|                                      |  | $         | 5,463 |              |  | $ | 4,955 |  
|                                      |  |           |       |              |  |   |       |  

Note 4: Earnings Per Share



| |                                                                                                                                                                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company computes basic earnings (loss) per share based on the
weighted average number of common shares outstanding. Diluted earnings per
share is computed based on the weighted average number of shares outstanding,
plus the number of additional common shares that would have been outstanding
if dilutive potential common shares had been issued.



| |                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | For the three months ended March 31, 2003 and 2002, no stock options,
preferred shares or warrants were included in the computation of diluted
earnings (loss) per share because the effect would have been anti-dilutive.

Note 5: Income Taxes



| |                                                                                                                                                                              
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys effective income tax rate for the quarters ended March 31,
2003 and 2002 differed from the federal statutory rate due to losses for
which no benefit was taken.

8



---



##### Table of Contents



Note 6: Comprehensive Loss



| |                                                                             
| | ----------------------------------------------------------------------------
| | Supplemental information on comprehensive loss is as follows (in
thousands):

|                                   |                                 |  |                              |  |      |   |        |    |   |   |         |    | 
|---------------------------------- | ------------------------------- |  | ---------------------------- |  | ---- | - | ------ | -- | - | - | ------- | -- | 
|                                   |                                 |  | Three months ended March 31,
|                                   |                                 |  |                             
|                                   |                                 |  | 2003                         |  | 2002
|                                   |                                 |  |                              |  |     
|Net loss                           |                                 |  |                              |  |      | $ | (2,661 | )  |   | $ | (27,341 | ) 
|Other comprehensive income (loss): |                                 |  |                              |  |      |   |        |    |   |   |         |   
|                                   | Currency translation adjustment |  |                              |  |      |   |        | (7 | ) |   |         | 42 | 
|                                   |                                 |  |                              |  |      |   |        |    |   |   |         |   
|                                   |                                 |  |                              |  |      | $ | (2,668 | )  |   | $ | (27,299 | ) 
|                                   |                                 |  |                              |  |      |   |        |    |   |   |         |   

Note 7: Goodwill and Other Intangible Assets



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under SFAS No. 142, Goodwill and Intangible Assets,goodwill impairment
is deemed to exist if the net book value of a reporting unit exceeds its
estimated fair value. A reporting unit is an operating segment or one level
below an operating segment referred to as a component. The Professional
Security Group (PSG) segment has two reporting units: U.S. Monitor
Dynamics, Inc. (MDI) and International MDI; the Diversified Sales Group
(DSG) segment has four reporting units: the consumer/do-it-yourself
business (SecurityandMore), ABM Data Systems (ABM), Industrial Vision
Source (IVS) and Mobile Video Products (MVP). There is also a reporting
unit for the Corporate segment.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In performing its impairment analysis under SFAS 142, the Company
completes a two step process to determine the amount of the impairment. The
first step involves comparison of the fair value of the reporting unit to the
carrying value to determine if any impairment exists. The second step
involves comparison of the implied fair value of the goodwill to the carrying
value of the goodwill. The implied fair value of the goodwill is determined
in the same manner as the amount of goodwill recognized in a business
combination. In calculating an impairment charge, the fair value of the
impaired reporting units underlying the segments are estimated using
discounted cash flow methodology or recent comparable transactions.



| |                                                                                       
| | --------------------------------------------------------------------------------------
| | The Company completed its transitional impairment analysis as required
by SFAS No. 142

9



---



##### Table of Contents





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | as of January 1, 2002. As a result, the Company recorded a non-cash
charge of approximately $14.8 million in the U.S. MDI reporting unit to
reduce the carrying value of its goodwill. Such charge is reflected as a
cumulative effect of an accounting change in the accompanying statement of
operations. Additionally, the Companys transitional impairment resulted in a
non-cash charge of approximately $11.3 million related to the CCTV business.
In calculating the impairment charge, the Company used the two-step process
in SFAS No. 142 and determined the fair value of the CCTV reporting unit
using recent comparable transactions. Such charge is reflected in the
statement of operations as a cumulative effect of an accounting change from
discontinued operations.

10



---



##### Table of Contents





| |                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------
| | As of March 31, 2003, the net carrying value of the Companys goodwill,
by segment, is as follows (in thousands):

|                                                      |  |     |       |     |  |       |       |  |  |   |       |  
|----------------------------------------------------- |  | --- | ----- | --- |  | ----- | ----- |  |  | - | ----- | -
|                                                      |  | PSG |       | DSG |  | Total
|                                                      |  |     |       |     |  |      
|Net carrying value at December 31, 2002               |  | $   | 3,953 |     |  | $     | 1,379 |  |  | $ | 5,332 |  
|Settlement of earnout payment on previous acquisition |  |     | (104  | )   |  |       |      |  |  |   | (104  | )
|                                                      |  |     |       |     |  |       |       |  |  |   |       |  
|Net carrying value at March 31, 2003                  |  | $   | 3,849 |     |  | $     | 1,379 |  |  | $ | 5,228 |  
|                                                      |  |     |       |     |  |       |       |  |  |   |       |  



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 25, 2003, the Company negotiated a full and final release of
claims to fulfill its obligation to the former owners of Monitor
Dynamics International, S.A., formerly known as Multi Concepts
Systemes S.A., (MCS), pursuant to the
purchase agreement executed in April 1999. This claim of $221,000 will be
paid in three equal installments during the second, third and fourth quarters
of 2003. As a result of this settlement, the Company reduced its related
liability of $325,000 and goodwill by $104,000.



| |                                                           
| | ----------------------------------------------------------
| | Intangible assets consist of the following (in thousands):

|                                           |  |              |      |          |  |                |     |                   |  |          |      |              |  |          |     |  |  |     |     |  |  |  |      |   |  |  |     | 
|------------------------------------------ |  | ------------ | ---- | -------- |  | -------------- | --- | ----------------- |  | -------- | ---- | ------------ |  | -------- | --- |  |  | --- | --- |  |  |  | ---- | - |  |  | --- | 
|                                           |  |              |      |          |  | March 31, 2003 |     | December 31, 2002
|                                           |  | Weighted     |      |          |  |               
|                                           |  | average      |      | Gross    |  |                |     |                   |  | Net      |      | Gross        |  |          |     |  |  | Net
|                                           |  | amortization |      | Carrying |  | Accumulated    |     | Carrying          |  | Carrying |      | Accumulated  |  | Carrying
|                                           |  | (years)      |      | Value    |  | Amortization   |     | Value             |  | Value    |      | Amortization |  | Value   
|                                           |  |              |      |          |  |                |     |                   |  |          |      |              |  |         
|Intangible assets subject to amoritization |  |              |      |          |  |                |     |                   |  |          |      |              |  |          |     |  |  |     |     |  |  |  |      |   |  |  |     | 
|Patents and trademarks                     |  |              | 17.1 |          |  | $              | 98  |                   |  |          | (45  | )            |  |          | 53  |  |  | $   | 98  |  |  |  | (42  | ) |  |  | 56  | 
|Licensing agreements                       |  |              | 3.7  |          |  |                | 80  |                   |  |          | (80  | )            |  |          |    |  |  |     | 80  |  |  |  | (80  | ) |  |  |    | 
|Loan origination fees                      |  |              | 3.0  |          |  |                | 549 |                   |  |          | (343 | )            |  |          | 206 |  |  |     | 549 |  |  |  | (275 | ) |  |  | 274 | 
|                                           |  |              |      |          |  |                |     |                   |  |          |      |              |  |          |     |  |  |     |     |  |  |  |      |   |  |  |     | 
|Total amortized intangible assets          |  |              |      |          |  | $              | 727 |                   |  |          | (468 | )            |  |          | 259 |  |  | $   | 727 |  |  |  | (397 | ) |  |  | 330 | 
|                                           |  |              |      |          |  |                |     |                   |  |          |      |              |  |          |     |  |  |     |     |  |  |  |      |   |  |  |     | 



| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Amortization expense related to intangible assets subject to
amortization was $72,000 and $136,000 for the three months ended March 31,
2003 and 2002, respectively.



| |                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The aggregate estimated future amortization expense for intangible
assets for each of the five succeeding years as of March 31, 2003 is as
follows (in thousands):

|                  |  |   |     | 
|----------------- |  | - | --- | 
|Remainder of 2003 |  | $ | 211 | 
|2004              |  |   | 7   | 
|2005              |  |   | 7   | 
|2006              |  |   | 7   | 
|2007              |  |   | 7   | 
|                  |  |   |     | 
|Total             |  | $ | 239 | 
|                  |  |   |     | 

11



---



##### Table of Contents



Note 8: Severance and Other Accrued Expenses



| |               
| | --------------
| | Ohio Severance



| |                                                                                                                                                                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | During 2002, the Company paid approximately $395,000 in severance costs
in connection with the closure of the Ohio facility. The Company paid
approximately $82,000 in severance costs during the first quarter of 2003.
The remaining accrued severance ($27,000) will be paid by the end of the
second quarter.



| |                                   
| | ----------------------------------
| | Executive and Management Severance



| |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Company decided to sever a number of its executives including the
past two CEOs, the Chief Operating Officer, the Senior Vice-President of the
domestic sales group and the Vice-President of Marketing. At December 31,
2002, unpaid obligations related to executive and management severance was
approximately $1.7 million. During the first quarter of 2003, the Company
paid approximately $287,000 related to these obligations.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In April 2003, the Board of Directors authorized management to
accelerate the last 18 months of severance due to the former Chief Executive
Officer (CEO), George Broady, in a lump sum, discounted at 6%, for
approximately $512,000. The 6% discount allowed the Company to reduce
its severance obligation to Mr. Broady by about $65,000. Mr. Broady continues to receive his remaining
severance payments on a bi-weekly basis through the end of June 2004. Also in
April 2003, Mr. Broadys employment was re-instated, as an assistant to the
current CEO, Mr. Bryan C.W. Tate, for a 12-month period, at a salary of
$2,500 a month plus a grant of 300,000 stock options.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In addition,
Mr. Broadys severance agreement, dated December 4,
2001, obligated the Company to
extend a loan to him to cover the funds needed for the exercise of any stock
options which remained outstanding to him upon the occurrence of a triggering
event. On January 30, 2003 Mr. Broady gave notice of the intent to exercise
options for 475,000 shares, at $1.42 (total of $674,500) under the terms of his
severance agreement. Mr. Broady did not execute the loan documents forwarded
to him by the Company, and therefore the 475,000 stock options expired.



| |              
| | -------------
| | Royalty Claim



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In 2002, the Company was notified it was subject to a royalty claim on
an Assignment Agreement in connection with a patent on electronic monitoring
and surveillance devices for the purposes of security and behavior
modification in public transportation vehicles (the Patent). The Company
acquired the ownership of the Patent in 1995 by entering into the Assignment
Agreement. The Patent was challenged in 1997 and the
re-examination was not completed until 2002. The re-examination upheld the Patent. The Company
recorded a charge of approximately $865,000 related to the dispute and paid
$150,000 during 2002. At December 31, 2002, the Company has $715,000 accrued
related to the dispute.



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 21, 2003, the Company reached a settlement in the amount of
$625,536 for all past claims as of December 31, 2002. A down payment of
$156,384, representing 25% of the settlement, was paid during April 2003. The
remaining amount will be paid in monthly installments of $20,582 over the
ensuing 24 months. A credit to earnings of approximately $90,000 will be
recorded in the second quarter of 2003 as a result of the settlement.

12



---



##### Table of Contents



Note 9: Segment Disclosures and Foreign Operations



| |                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys underlying accounting records are maintained on a legal
entity basis for government and public reporting requirements. Segment
disclosures are on a performance basis consistent with internal management
reporting. The Company evaluates performance based on operating profit (loss).
The Company has two operating segments: the Professional Security Group (PSG)
and the Diversified Sales Group (DSG).



| |    
| | ---
| | PSG



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The PSG segment consists primarily of the access control sales in the
United States to professional security dealers, installers and certain
large-end users of professional security products, including the U.S.
Government. The domestic access control business is supplemented by a growing
international integration and distribution business based in Switzerland. The
product range for the international unit is the same as the one for the U.S.



| |    
| | ---
| | DSG



| |                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | DSG includes four components; the consumer/do-it-yourself business, the
industrial video business, the alarm management business and the mobile video
product business.



| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The consumer do-it-yourself business, SecurityandMore, based in
Lewisville, Texas, and includes a call center and Internet site,
SecurityandMore.com, which focus on consumer oriented security products.



| |                                                                                                                                                                                                             
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Industrial Visual Source (IVS) and Mobile Video Products (MVP)
cater to the video and security needs of manufacturing facilities, scientific
labs, research organizations and mass transit vehicles.



| |                                                                                                                                                                                                                                                                   
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The alarm management business, ABM Data Systems, Inc. (ABM), sells
software products to central monitoring stations that are owned by either
proprietary organizations such as large university campuses or commercial
operators such as surveillance companies.



| |          
| | ---------
| | Corporate



| |                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------
| | The corporate functions of legal, financial, information technologies,
internal audit, accounting and reporting are located in Lewisville, Texas.

13



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##### Table of Contents



|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|-------------------------------------------- |  | --- | ------ | --- |  | --------- | ----- | ----- |  | - | ------ | - |  | - | ------ | -
|                                             |  | PSG |        | DSG |  | Corporate |       | Total
|                                             |  |     |        |     |  |           |       |      
|Three months ended March 31, 2003            |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Total revenue                                |  | $   | 5,046  |     |  | $         | 6,393 |       |  | $ |       |   |  | $ | 11,439 |  
|Intersegment revenue                         |  |     | (42    | )   |  |           | (2    | )     |  |   |       |   |  |   | (44    | )
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Revenue from external customers              |  | $   | 5,004  |     |  | $         | 6,391 |       |  | $ |       |   |  | $ | 11,395 |  
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Gross profit                                 |  | $   | 2,053  |     |  | $         | 1,570 |       |  | $ |       |   |  | $ | 3,623  |  
|Selling, general and administrative expenses |  |     | 2,354  |     |  |           | 1,044 |       |  |   | 1,476  |   |  |   | 4,874  |  
|Depreciation and amortization expense        |  |     | 209    |     |  |           | 20    |       |  |   | 275    |   |  |   | 504    |  
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Operating profit (loss)                      |  | $   | (510   | )   |  | $         | 506   |       |  | $ | (1,751 | ) |  | $ | (1,755 | )
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Three months ended March 31, 2002            |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Total revenue                                |  | $   | 4,018  |     |  | $         | 7,122 |       |  | $ |       |   |  | $ | 11,140 |  
|Intersegment revenue                         |  |     | (1,299 | )   |  |           | (70   | )     |  |   |       |   |  |   | (1,369 | )
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Revenue from external customers              |  | $   | 2,719  |     |  | $         | 7,052 |       |  | $ |       |   |  | $ | 9,771  |  
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Gross profit                                 |  | $   | 1,126  |     |  | $         | 1,776 |       |  | $ |       |   |  | $ | 2,902  |  
|Selling, general and administrative expenses |  |     | 1,785  |     |  |           | 688   |       |  |   | 1,876  |   |  |   | 4,349  |  
|Depreciation and amortization expense        |  |     | 14     |     |  |           | 32    |       |  |   | 590    |   |  |   | 636    |  
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  
|Operating profit (loss)                      |  | $   | (673   | )   |  | $         | 1,056 |       |  | $ | (2,466 | ) |  | $ | (2,083 | )
|                                             |  |     |        |     |  |           |       |       |  |   |        |   |  |   |        |  



| |                                       
| | --------------------------------------
| | Geographic Information (in thousands):

|       |               |   |                              |       |      |   |       |       | 
|------ | ------------- | - | ---------------------------- | ----- | ---- | - | ----- | ----- | 
|       |               |   | Three months ended March 31,
|       |               |   |                             
|       |               |   | 2003                         |       | 2002
|       |               |   |                              |       |     
|Sales: |               |   |                              |       |      |   |       |      
|       | United States |   | $                            | 9,885 |      |   | $     | 9,499 | 
|       | Switzerland   |   |                              | 1,510 |      |   |       | 272   | 
|       |               |   |                              |       |      |   |       |       | 
|       |               | $ | 11,395                       |       |      | $ | 9,771 |      
|       |               |   |                              |       |      |   |       |       | 

Note 10: Stock Repurchase



| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On March 12, 2003, the Board of Directors approved a plan to repurchase
up to 200,000 shares of the Companys Common Stock through April 12, 2003. The
Company has repurchased 18,200 shares for approximately $18,048 under the
repurchase plan.

14



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##### Table of Contents



Note 11: Subsequent Events



| |                         
| | ------------------------
| | CEO Compensation Package



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | In April 2003, a compensation package for the Companys Chief Executive
Officer (CEO), Mr. Bryan C.W. Tate, was approved by the Compensation
Committee of the Board of Directors. The package included a base salary of
$250,000 and a grant of 280,000 stock options - half of which vested immediately and the
other half vested one year from grant. The CEO was also granted 140,000
restricted shares of common stock, one-half vesting on
January 1, 2004 and one-half vesting on January 1, 2005. In addition, the compensation package includes regular
benefits, $750 per month car allowance and reimbursed relocation expenses.



| |                               
| | ------------------------------
| | Sale of Ohio Land and Building



| |                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | On April 7, 2003, the Company completed the sale of its land and
building in Carroll, Ohio for net cash proceeds of approximately $1,419,000.
This transaction will result in a net gain from discontinued operations of approximately
$165,000 during the second quarter of 2003.



| |                              
| | -----------------------------
| | Corporate Headcount Reduction



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | After the Honeywell Asset Sale, the Companys management determined that
the ongoing operations could not support the current corporate overhead
structure. On April 30, 2003, the decision was made to terminate certain
corporate personnel, including Companys Senior Vice-President and General
Counsel. The Company will recognize approximately $335,000 in expense related
to these severance obligations during the second quarter of 2003.

15



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##### Table of Contents






ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Results of Operations

Financial statements for the three months ended March 31, 2003 and 2002
have been restated to report the Companys CCTV Business as discontinued
operations (see note 1 to the Companys Consolidated Financial Statements for
additional detail).

The results of operations are discussed as a whole, and where appropriate,
by segment (see note 9 to the Companys Consolidated Financial Statements for
additional detail).

The following table contains information regarding the percentage of net
sales of certain income and expense items for the three months ended March 31,
2003 and 2002 and the percentage changes in these income and expense items from
year to year:

|                                                                                      |                                     |  |                              |      |                 |  |        |      |   |  |            |       |  
|------------------------------------------------------------------------------------- | ----------------------------------- |  | ---------------------------- | ---- | --------------- |  | ------ | ---- | - |  | ---------- | ----- | -
|                                                                                      |                                     |  |                              |      |                 |  |        |      |   |  | Percentage
|                                                                                      |                                     |  |                              |      |                 |  |        |      |   |  | Increase  
|                                                                                      |                                     |  |                              |      |                 |  |        |      |   |  | (Decrease)
|                                                                                      |                                     |  | Percentage of Net Sales      |      | Between Periods
|                                                                                      |                                     |  |                              |      |                
|                                                                                      |                                     |  | Three months ended March 31, |      | 2003 vs.       
|                                                                                      |                                     |  | 2003                         |      | 2002            |  | 2002  
|                                                                                      |                                     |  |                              |      |                 |  |       
|Net Sales                                                                             |                                     |  | 100.0                        | %    |                 |  | 100.0  | %    |   |  | 16.6       | %    
|Cost of sales                                                                         |                                     |  | 68.2                         | %    |                 |  | 70.3   | %    |   |  | 13.1       | %    
|Gross profit                                                                          |                                     |  | 31.8                         | %    |                 |  | 29.7   | %    |   |  | 24.8       | %    
|Operating expenses:                                                                   |                                     |  |                              |      |                 |  |        |      |   |  |            |      
|                                                                                      | Selling, general and administrative |  |                              | 42.8 | %               |  |        | 44.5 | % |  |            | 12.1  | %
|                                                                                      | Depreciation and amortization       |  |                              | 4.4  | %               |  |        | 6.5  | % |  |            | -20.8 | %
|Operating loss                                                                        |                                     |  | -15.4                        | %    |                 |  | -21.3  | %    |   |  | -15.7      | %    
|Other income (expense)                                                                |                                     |  | -2.1                         | %    |                 |  | -7.8   | %    |   |  | -68.3      | %    
|Loss before taxes, discontinued
operations and cumulative
effect of accounting change |                                     |  | -17.5                        | %    |                 |  | -29.1  | %    |   |  | -29.8      | %    
|Loss from continuing operations                                                       |                                     |  | -17.5                        | %    |                 |  | -29.1  | %    |   |  | -29.8      | %    
|Income (loss) from discontinued operations                                            |                                     |  | -5.8                         | %    |                 |  | 16.6   | %    |   |  | -141.0     | %    
|Cumulative effect of accounting change                                                |                                     |  | 0.0                          | %    |                 |  | -267.3 | %    |   |  | 100.0      | %    
|Net loss                                                                              |                                     |  | -23.4                        | %    |                 |  | -279.8 | %    |   |  | -90.3      | %    

16



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##### Table of Contents



Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002

For the three months ended March 31, 2003, net sales were $11.4 million,
an increase of $1.7 million (17%) over the same period in 2002. Sales in the
PSG segment increased $2.1 million (84%), $5.0 million during the first quarter
of 2003 compared to $2.7 million during the same period in 2002, resulting from
a sale to a French casino of approximately $1.1 million and an overall increase
in domestic access control product sales. Sales in the DSG segment declined
$0.7 million (10%) to $6.3 million during the first quarter of 2003 compared to
$7.1 million during the same period in 2002. Although sales in the consumer
do-it-yourself business increased $1.1 million as a result of additional sales
to a national retailer, sales declined in the industrial video business ($1.5
million) and the central station alarm management business ($0.3 million).

Gross profit margins improved from 29.7% during the three months ended
March 31, 2002 to 31.8% during the three months ended March 31, 2003. The
margin increased as a result of a more favorable product mix towards the
higher-margin access control business.

Selling, general and administrative expenses were $4.9 million for the
three months ended March 31, 2003, an increase of $0.5 million (12%) over the
same period in 2002. There were $0.6 million (32%) of additional expenses
during the three months ended March 31, 2003 in the PSG segment for additional
investment in engineering, marketing and customer support infrastructure in
California and an increase in the sales and sales support personnel in
Switzerland. Expenses in the DSG segment were $0.3 million higher during the
first quarter of 2003. There was a decrease of $0.4 million in expenses in the
Corporate segment related primarily to executive positions during the first
quarter of 2002 that were eliminated by December 2002. The positions of Senior
Vice President of Sales, President and Chief Operating Officer were eliminated
in 2002 and the Company does not intend to replace them. The Company incurred
an additional $0.4 million expenses during the first quarter of 2003 that did
not relate to the on-going operations of the business. These expenses included
$170,000 paid to former members of the Companys board of directors.
Furthermore, the Company incurred additional professional fees related to
former board of directors members.

Depreciation and amortization expenses were $0.5 million for the three
months ended March 31, 2003, a decrease of $0.1 million (15%) over the same
period in 2002. This decrease resulted primarily from the $2.7 million
write-down of the Companys SAP system during the fourth quarter of 2002.

Other expenses during the first quarter of 2003 were $0.2 million,
compared with $0.8 million during the same period in 2002. The decrease was
primarily related to interest and loan amortization costs on the revolving
credit facility that the Company paid in full with the proceeds received from
the Honeywell Asset Sale in December 2002.

17



---



##### Table of Contents



Financial Condition, Liquidity and Capital Resources

During the first quarter of 2003, the Companys cash and cash equivalents
decreased from $16.4 million at December 31, 2002 to $12.4 million at March 31,
2003.

The largest component of the net cash used in operations of $3.9 million
was primarily the $2.6 million net loss as well as the decrease in accrued
liabilities. The build-up of inventory of approximately $1.1 million, due to
expected second quarter sales increases in the access control and the consumer
do-it-yourself businesses, was more than offset by the increase in accounts
payable.

During the next twelve months, the Companys primary source of liquidity
will be its cash and cash equivalents. Although cash requirements will
fluctuate depending on the timing and extent of many factors, the Company
believes that the existing cash balances will be sufficient to satisfy the
Companys liquidity requirements for at least the next 12 months.

Contractual Obligations and Commitments

The following table summarizes the Companys contractual obligations and
commitments with definitive payment terms that will require cash outlays in the
future. These amounts are as of March 31, 2003 (in thousands):

|                                         |  |       |       |      |  |      |       |      |  |      |       |  |  |   |     |  |  |   |    | 
|---------------------------------------- |  | ----- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  | - | --- |  |  | - | -- | 
|                                         |  | Total |       | 2003 |  | 2004 |       | 2005 |  | 2006
|                                         |  |       |       |      |  |      |       |      |  |     
|Contractual obligations and commitments: |  |       |       |      |  |      |       |      |  |      |       |  |  |   |     |  |  |   |    | 
|Operating leases                         |  | $     | 1,547 |      |  | $    | 904   |      |  | $    | 392   |  |  | $ | 197 |  |  | $ | 54 | 
|Royalty obligation                       |  |       | 750   |      |  |      | 346   |      |  |      | 272   |  |  |   | 107 |  |  |   | 25 | 
|Severance obligations                    |  |       | 1,706 |      |  |      | 1,304 |      |  |      | 402   |  |  |   |    |  |  |   |   | 
|                                         |  |       |       |      |  |      |       |      |  |      |       |  |  |   |     |  |  |   |    | 
|                                         |  | $     | 4,003 |      |  | $    | 2,554 |      |  | $    | 1,066 |  |  | $ | 304 |  |  | $ | 79 | 
|                                         |  |       |       |      |  |      |       |      |  |      |       |  |  |   |     |  |  |   |    | 

The
Company has an option to purchase its
Lewisville headquarters facility for $7,550,000 by giving notice to
the owner of its intent to purchase on or before November 30,
2003. Such amount is not included in this table as the Company is not
contractually obligated to exercise the option.

The royalty obligation includes $650,000 in future payments for all past
claims (see Note 8  Royalty Claim) and a minimum annual payment of $25,000 per
year for future obligations.

The accrued severance at December 31, 2002, included $512,000 in long-term
severance obligations related to the Companys former Chief Executive Officer,
Mr. George Broady (see Note 8 - Executive and Management Severance). This
amount has been reclassified as a 2003 obligation.

This table does not include $335,000 in severance obligations related to
personnel reductions approved on April 30, 2003 (see Note 11 - Corporate
Headcount Reduction).

18



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##### Table of Contents






ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Foreign Exchange

Since the access control office in Switzerland is the Companys only
significant foreign-based operation, accounting for approximately 13% of the
total consolidated sales during the first quarter of 2003, the Company does not
expect currency fluctuation to have a material adverse effect on its future
consolidated financial position or results of operation.

Interest Rates

An interest rate swap agreement with Bank One remains in effect through
February 15, 2004. This agreement provides a fixed rate of 6.485% on $5.0
million of debt. This agreement generated interest expense of $39,000 for the
three months ended March 31, 2003.




ITEM 4. CONTROLS AND PROCEDURES

An evaluation was performed under the supervision and with the
participation of management, including the Chief Executive Officer and Chief
Financial Officer, of the effectiveness of the design and operation of our
disclosure controls and procedures within 90 days before the filing of this
quarterly report. Based on that evaluation, the management, including the Chief
Executive Officer and the Chief Financial Officer, concluded that the
disclosure controls and procedures were effective. There have been no
significant changes in the Companys internal controls or in other factors that
could significantly affect internal controls subsequent to their evaluation.

19



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##### Table of Contents






PART II




ITEM 1.        LEGAL PROCEEDINGS

The Company is subject to various legal proceedings and
claims, either asserted or unasserted, that arise in the ordinary course of
business. Although the outcomes of these legal proceedings cannot be predicted
with certainty, management does not believe that any of these existing legal
matters will have a material adverse effect on the Companys financial
condition or results of operations.




ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS

None.




ITEM 3.       DEFAULTS UPON SENIOR SECURITIES

None.




ITEM 4.       SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.




ITEM 5.       OTHER INFORMATION
       None.




ITEM 6.       EXHIBITS AND REPORTS ON FORM 8-K



| | a) |  | A Form 8-K was filed with the Securities and Exchange Commission
(SEC) on April 28, 2003 announcing a settlement of a disputed patent
pertaining to electronic monitoring and surveillance devices installed
in public transportation vehicles.
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | A Form 8-K was filed with the SEC on March 13, 2003, in the form of
an open letter to shareholders from the Chief Executive Officer,
summarizing the Companys retained businesses and announcing a $200,000
share repurchase program.           
|
| | c) |  | A Form 8-K was filed with the SEC on February 28, 2003 to announce
the election of Bryan C.W. Tate as the Chairman of the Companys Board
of Directors (the Board) and other changes in the composition of the
Board.                          
|
| | d) |  | A Form 8-K was filed with the SEC on January 3, 2003 that summarized
the provisions of the Honeywell Asset Sale and announced the Companys
name change from Ultrak, Inc. to American Building Control, Inc.                                 
|
| | e) |  | Exhibit 99.1  Certification of Principal Executive Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                            
|
| | f) |  | Exhibit 99.2  Certification of Principal Financial Officer pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                            

20



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##### Table of Contents






SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on behalf by the undersigned, thereunto duly authorized.

|                    |  |                                 |  |                                                               
|------------------- |  | ------------------------------- |  | --------------------------------------------------------------
|                    |  | AMERICAN BUILDING CONTROL, INC.
|                    |  |                                 |  |                                                               
|Dated: May 14, 2003 |  | By:                             |  | /s/ CHRIS SHARNG                                              
|                    |  |                                 |  |                                                               
|                    |  |                                 |  | Chris Sharng
Senior Vice President and
Chief Financial Officer

21



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##### Table of Contents






CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bryan C.W. Tate, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of American
Building Control, Inc. for the period ended March 31, 2003;                                                                                                                                                                                                    
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operation and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                    
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluate the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                   
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of the registrants board of directors (or persons
performing the equivalent function):
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely effect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|             |  |                                                           
|------------ |  | ----------------------------------------------------------
|May 14, 2003 |  | /s/ Bryan C.W. Tate
Bryan C.W. TateChief Executive Officer

22



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##### Table of Contents



CERTIFICATION PURSUANT TO 18 U.S.C. 1350, AS ADOPTED PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Chris Sharng, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of American
Building Control, Inc. for the period ended March 31, 2003;                                                                                                                                                                                                    
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report;
|  
|3. |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operation and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                    
|  
|4. |  | The registrants other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
we have:                                                                                                     



| | a) |  | designed such disclosure controls and procedures to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | evaluate the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the Evaluation Date); and                                                                                                   
|
| | c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of the registrants board of directors (or persons
performing the equivalent function):
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | all significant deficiencies in the design or operation of
internal controls which could adversely effect the registrants
ability to record, process, summarize and report financial data and
have identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|             |  |                                                     
|------------ |  | ----------------------------------------------------
|May 14, 2003 |  | /s/ Chris Sharng
Chris SharngChief Financial Officer

23



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##### Table of Contents



EXHIBIT INDEX

|              |  |                                                                                                                                                       
|------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------
|EXHIBITNUMBER |  |                                                                                                                                                       
|              |  | DESCRIPTION                                                                                                                                           
|              |  |                                                                                                                                                       
|Exhibit 99.1  |  | Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|Exhibit 99.2  |  | Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.