Press release: 

Herndon, VA—December 6, 2006 — SteelCloud, Inc. (Nasdaq: SCLD), a leading engineering and manufacturing integrator of network centric and embedded computing solutions today announced it has been awarded a contract valued at nearly $10 Million by the U.S. Postal Service Engineering Department to provide specialized servers for the FRIP Program.

The initial contract calls for initial deliveries in early 2007 to the FRIP prime contractor, Siemens Energy & Automation, Inc. Postal Automation Division in Arlington, Texas. By summer 2007, additional servers will be installed at select postal locations. In the Fall, the remaining production servers will be deployed throughout the U.S. Under terms of the agreement, the US Postal Service has an option to purchase additional servers for another $2.6 Million within six months of the initial contract award for delivery in the company’s fiscal year 2008. Exercise of this option will result in approximately $12.6 Million in total contract revenue.

SteelCloud has years of experience designing and delivering specialized servers for the U.S. Postal Service. SteelCloud has previously designed servers for this customer which have performed over 100 million hours in similar industrial settings.

“The award is a perfect example of our Company’s ability to design and deliver specialized servers for challenging environmental conditions,” said Clifton W. Sink, SteelCloud CEO and President. “In this case we incorporated active cooling and filtration techniques into our chassis design to cope with mail nap, paper dust and heat. In addition, the servers are designed to withstand shock and vibration normally found in these industrial installations.”

SteelCloud expects to recognize over $140,000 in revenues from the program in the Company’s fiscal first quarter which ends January 31, 2007 and nearly $400,000 in the Company’s third fiscal quarter. Rollout for the production units, valued at over $9,000,000, is planned to occur during the Company’s fiscal fourth quarter 2007 which ends October 31, 2007. All the specialized servers will be delivered in accordance with the Company’s ISO 9001:2000 Quality Management System.

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