RAE Systems Signs Definitive Agreement to Sell Its Interest in Its RAE Fushun Joint Venture (RAE)

RAE Systems Inc. RAE announced it has signed a definitive agreement to sell its 70 percent interest in the RAE Fushun joint venture (the "Joint Venture") to the Shenyang Research Institute of China Coal Research. Although the company will not receive any direct compensation for its ownership interest in the Joint Venture, under the terms of the agreement the Shenyang Research Institute of China Coal Research will assume all documented joint venture liabilities at the closing of the transaction as well as repay to RAE Systems amounts owed to RAE KLH and RAE Shanghai for products and services previously provided to the joint venture. The agreement is expected to close on or before March 31, 2011, subject to customary closing conditions. Robert Chen, RAE Systems president and CEO, stated: "We previously stated our intention to exercise a disciplined exit from our investment in RAE Fushun as the performance of this business has not met our long-term revenue and operating margin growth expectations. We expect going forward that the exclusion of RAE Fushun operating losses will result in improved operating and net income for the company in the future. We are focusing on long-term growth prospects that fit within our mission to be the leading innovator of safety and security products that deliver wireless real-time data to enable our customers to make faster, better decisions to keep people and property safe." Established in December of 2006, the joint venture was established with Liaoning Coal Industry Group Co., Ltd for the purposes of engaging in the manufacturing and sale of safety equipment for the coal mine industry.