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InkSure Technologies Reports Continued Revenue Growth in 2006

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	midastouch017			Wednesday, March 28, 2007 7:28:47 AM
	Re: None			Post # of 353

InkSure Technologies Reports Continued Revenue Growth in 2006
Tuesday March 27, 1:42 pm ET
Gross Profit Margin Widens to 57% of Revenues

FT. LAUDERDALE, Fla., March 27 /PRNewswire-FirstCall/ -- InkSure Technologies Inc. (OTC Bulletin Board: INKS - News), a leading provider of covert machine-readable security solutions for the prevention of counterfeiting, fraud and diversion today reported its operating results for 2006.

For the twelve months ended December 31, 2006, revenues increased 23% to $2,002,000, compared with revenues of $1,626,000 in the year ended December 31, 2005. Gross profit increased 35% to $1,138,000 in 2006 (56.8% of revenues), compared with $842,000 (51.8% of revenues) in 2005. The Company reported a net loss of ($3,112,000), or ($0.20) per share, in the year ended December 31, 2006, versus a net loss of ($2,213,000), or ($0.15) per share, in the previous year. The increase in net loss was almost entirely due to $891,000 in non-cash expenses related to the implementation of SFAS No. 123R. Research and development expenses increased 36% in 2006 to $1,186,000, including $76,000 in non-cash expenses related to the implementation of SFAS No. 123R, as the Company continued to pursue the development and implementation of its "chipless" RFID technology.

In the three months ended December 31, 2006, revenues increased 31% to $792,000, versus revenues of $606,000 in the fourth quarter of 2005. The Company had a net loss of ($502,000), in the fourth quarter of 2006, compared with a net loss of ($436,000) in the quarter ended December 31, 2005.

"We are very pleased to report that our gross profit margin improved to 56.8% of revenues in 2006, when compared with 51.8% of revenues in 2005, as increased utilization of our covert security systems prompted existing and new customers to purchase greater amounts of SmartInk(TM) and other consumables," stated Elie Housman, Chief Executive Officer of InkSure Technologies Inc. "The increase in fourth quarter sales reflected, in part, initial shipments of electro-optic readers and other equipment associated with an international tax mark project in the Far East. Shipments of additional equipment related to this contract will be reflected in revenues during the first quarter of 2007, and we expect to receive recurring revenues from the use of encoded inks in the application of secure tax marks to hundreds of millions of beverage containers annually. In light of the huge revenue losses incurred by governments due to counterfeiting activities around the world, we believe the market for securing tax stamps and marks represents a very large revenue opportunity for InkSure, and we expect new opportunities in this field in 2007."

"While long sales cycles and complex implementation periods for large-scale projects can frustrate our ability to predict revenues on a quarterly basis, we view 2006 as a year of significant progress in several industries with long-term potential," continued Housman. "We laid the foundation for a geographic expansion in our sales and marketing activities in the Far East last year, and additional resources will be dedicated towards opportunities in this part of the world. While we expect only modest revenues from new customers in the Far East this year, we expect substantial growth in 2008, as the need for anti-counterfeiting technology in such countries as India, China and Taiwan is great. On other fronts, a number of pharmaceutical companies are currently working with InkSure to develop covert security solutions for an industry that faces global counterfeiting issues. In the automotive market, a world-class provider of print and fulfillment services is now incorporating our SmartInk into the packaging labels for the aftermarket parts of one of the world's leading auto manufacturers. Meanwhile, our largest customer -- a Fortune 500 company -- expanded its relationship with InkSure last year by ordering a second SmartInk code for additional product authentication applications."

"As InkSure enlarges its customer base, it also creates the foundation for recurring revenue growth through the sale of SmartInk to users of its covert security solutions. We believe that 2007 may be a 'breakout' year for our covert security solutions business by every measure, including sales growth, bottom line improvement and the achievement of positive cash flow. In addition, we have made great progress towards our goal of being able to produce and deliver 'chipless' RFID printed codes at a cost of less than $0.01 each, thereby targeting a potentially significant market niche that involves the replacement of 'barcodes' in certain industries. During 2006, we entered into testing agreements with several major printing companies, and our goal remains to commercially introduce 'chipless' RFID SARcodes(TM) as soon as possible following the completion of such field tests," concluded Housman.

The Company will host a conference call tomorrow, March 28, 2007 at 11:00 a.m. Eastern Daylight Time to discuss 2006 operating results and the outlook for 2007. Shareholders and other interested parties may participate in the conference call by dialing 888-694-4702 (international/local participants dial 973-582-2741) and referencing the ID code 8557916, a few minutes before 11:00 a.m. EDT on March 28, 2007. A replay of the conference call will be available two hours after the completion of the conference call from March 28, 2007 until April 4, 2007 by dialing 877-519-4471 (international/local participants dial 973-341-3080) and entering the conference ID 8557916.

http://biz.yahoo.com/prnews/070327/latu101.html?.v=89

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