The students were outside for recess when they allegedly spotted the man.
Upper Merion police tell Action News that they searched two homes adjacent to the Caley Elementary School and did not find the man or possible weapon.
The homes that were searched are located on Regimental Road which backs up to Caley Elementary School.
Police remain in the area and continue to search for the unidentified male.
The school district notified its parents about the incident through its call-system.
No one was injured.
The lockdown at the school was lifted at 3:00 p.m.
