Citadel Security Software Announces $3 Million in Year-end Orders for Security Compliance and Vulnerability Management

1 January 1970

$1.6 Million Order from Government Organization, $900,000 Order from Rapidly Growing Regional Bank and $400,000 from International Organizations Highlight

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DALLAS, Jan. 9 -- Citadel Security Software Inc. (Nasdaq: CDSS), a leader in enterprise vulnerability management and policy compliance solutions, announced today that it has received approximately $3 million in new orders since it announced third quarter results on November 8, 2005. The new orders increase the Company's order value for the fourth quarter to approximately $4.3 million.

Some of the highlights of the recent orders include:

* Long Standing Prominent Government Organization. The Company

received a renewal order for $1.6 million for Hercules content and

customer support services from a long standing governmental agency

running Hercules across its worldwide enterprise.

* Rapidly Growing Regional Bank. Citadel added its eleventh financial

services company to its Hercules customer base (the ninth in 2005)

with the receipt of a three year contract valued at over $900,000

from a Midwestern financial institution.

* International Orders. During the quarter the company entered the

international market and received international orders, from the

Middle East and Mexico, for Hercules, valued at approximately

$400,000.

"Our fourth quarter orders are highly encouraging as we continue to add customers from the financial services sector and gained entry into the international market in a very short period of time, having only launched our international sales effort in October 2005," said Steve Solomon, CEO of Citadel Security Software. "The order distribution came from both corporate and government customers, based in both the U.S. and internationally.

"We have demonstrated the value of Hercules in the federal government sector and further believe that our increasing foothold in the financial services industry demonstrates that more and more corporations are beginning to recognize the value of the Hercules solution with its library of over 25,000 V-Flash remedies for securing Windows, UNIX, LINUX and other operating system platforms as the most comprehensive solution available in the market," Solomon added. "With both an enterprise solution as well as an appliance, we feel that Citadel is uniquely positioned to participate in the growing need for innovative security solutions by both governmental entities and corporations."

The Company announced on November 8th that it expected 2005 revenue in a range of $12 million to $14 million. Since most of the orders announced today were completed at the end of the fourth quarter and are more ratable over future periods than previously anticipated and since other prospective orders were not finalized by the end of the quarter, Citadel expects that 2005 revenue will be below the level estimated in its previous business update. The Company expects to report its fourth quarter and year-end results in late February.

About Citadel Security Software Inc.

Citadel Security Software Inc. delivers security solutions that enable organizations to manage risk, reduce threats and enforce compliance with security policies and regulations. Citadel's proven architecture provides a business process to manage the increasing volume, frequency and complexity of cyber security attacks. Citadel combines the world's largest active library of remediations spanning all classes of vulnerabilities with a proven delivery methodology to dramatically streamline vulnerability management and security compliance and provide ROI from the first use. Citadel solutions are used across the Department of Defense, at the Veterans Administration, and within other government and commercial organizations. For more information on Citadel, visit http://www.citadel.com, or call 888-8CITADEL.

Forward-Looking Statements:

This press release may contain forward-looking statements that are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or future financial performance and involve known and unknown risks and uncertainties that may cause actual results or performance to be materially different from those indicated by any forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "forecast," "may," "will," "could," "should," "anticipate," "expect," "plan," "believe," "potential" or other similar words indicating future events or contingencies. Some of the things that could cause actual results to differ from expectations are: adjustments to reported revenues based on audit adjustments and revenue recognition accounting requirements; uncertainties related to the issuance of a patent by the United States Patent and Trademark Office; the possibility of other intellectual property rights held by third parties related to the technology; uncertainty related to projected cost savings from restructuring activities; the economic and geopolitical environment; changes in the information technology spending trends; the uncertainty of funding of government and corporate information technology security projects; the variability of the product sales cycle, including longer sales cycles for government and large commercial contracts; the uncertainty that the company's prospective deals will result in final contracts; the potential changes in the buying decision makers during a customer purchasing cycle; the complexities in scope and timing for finalization of contracts; the fluctuations in product delivery schedules; a lack of Citadel operating history; uncertainty of product development and acceptance; uncertainty of ability to compete effectively in a new market; the uncertainty of profitability and cash flow of Citadel; intellectual property rights and dependence on key personnel; economic conditions; the continued impact of terrorist attacks, global instability and potential U.S. military involvement; the competitive environment and other trends in the company's industry; the effects of inflation; changes in laws and regulations; changes in the company's business plans, including shifts to new pricing models that may cause delays in licenses; interest rates and the availability of financing; liability, legal and other claims asserted against the company; labor disputes; and the company's ability to attract and retain qualified personnel. For a discussion of these and other risk factors, see the company's Annual Report on Form 10- KSB for the year ended December 31, 2004 and the company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2005. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed therein. These risk factors may not be exhaustive. The company operates in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on the company's business or events described in any forward-looking statements. The company disclaims any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results.

Editors Note: Citadel is a trademark and Hercules(R) is a registered trademark of Citadel Security Software.

Source: prnewswire

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