Document Security Systems, Inc. Reports Second Quarter 2011 Financial Results

Document Security Systems, Inc. Reports Second Quarter 2011 Financial Results

ROCHESTER, NY--August 15, 2011 — Document Security Systems, Inc. (NYSE Amex: DSS; "DSS"), a world-wide developer and manufacturer of security and authentication solutions which prevent counterfeiting and brand fraud, reported results for the second quarter ended June 30, 2011. Management will host a teleconference and web cast today at 4:15 pm ET to discuss the results with the investment community:

Time: 4:15 p.m. Eastern Time

Date: Monday, August 15th, 2011

Investor Dial-in (Toll Free): 877-407-9210

Investor Dial-In (International): 201-689-8049

Live Web Cast URL: http://www.investorcalendar.com/IC/CEPage.asp?ID=165625

A replay of the teleconference will be available until August 29, 2011, which can be accessed by dialing (877) 660-6853 if calling within the U.S. or (201) 612-7415 if calling internationally. Please enter account #286 and conference ID #377482 to access the replay. The webcast will be available for replay within the Investor Relations “Events & Presentations” section of the DSS home page located at www.DSSsecure.com.

Second Quarter 2011 Highlights

• Sales of $2.9 million up 7% from first quarter of 2011, down 14% from the second quarter 2010.
• Gross margin percentage of 28% up from 26% in the second quarter of 2010.
• Operating expenses increased 13% from the first quarter of 2011, up 8% from the second quarter 2010. The bulk of this increase was due to an increase in sales and marketing related expenses, the acquisition of a cloud computing company called Extradev, Inc. and a major re-branding project the company recently completed.
• Net loss of $1,112,000, an increase of 12% from the second quarter of 2010.
• Net loss per share of $(0.06), flat with the net loss per share in the second quarter of 2010.

First Half 2011 Highlights

• Sales of $5.6 million down 9% from the first half of 2010.
• Gross profit up 1% from the first half of 2010.
• Gross margin percentage of 31% up from 28% in the first half of 2010.
• Operating expenses decreased 5% from the first half of 2010.
• Net loss of $1,510,000, a decrease of 29% from the first half of 2010 loss.
• Net loss per share of $(0.08) compared to $(0.12) in the first half of 2010.

Patrick White, DSS’s CEO, stated: “ Unfortunately, the positive 2nd quarter results from four of our five operating divisions were overshadowed by the continuing struggles in our non-core commercial printing unit, and expense increases from a front loading of sales and marketing costs and costs associated with our successful re-branding project we completed during the quarter.. We are excited about the solid financial performances of our core business divisions, (security licensing and printing, plastics, packaging and digital) achieved during the quarter.
It is important to note that Management is weighing certain options for the non-core commercial printing component of our business.

Furthermore, during the second quarter we formed our new Digital Division based on our acquisition of ExtraDev, Inc. which joined DSS in the second quarter. This new group adds an exciting new business line to our Company as it provides a delivery system for our various digital security products. Our targeted sales and marketing efforts, including the launch during the second quarter of our new marketing identity, logo and website, has allowed DSS to make inroads with potentially significant customers, as well as increased our recognition in the industry. The opportunities that exist for our security products continue to be immense, and we are confident that we are very well positioned to capitalize on the opportunities.”

About DSS (Document Security Systems, Inc.)
DSS is comprised of four core operating groups, DSS Plastics Group, DSS Secure Printing Group, DSS Packaging Group and DSS Digital Group. Through these divisions, DSS provides counterfeit prevention and comprehensive brand and digital information protection solutions to corporations, governments, and financial institutions around the world. DSS develops and manufactures products and services containing patented and patent pending optical deterrent technologies that help prevent counterfeiting and brand fraud from the use of the most advanced scanners and copiers in the market.

The Company owns numerous patented and patent-pending technologies and products. DSS uses its covert and overt technologies to protect a wide range of documents including, but not limited to, consumer packaging, vital records, ID Cards/RFID, smart cards, passports, gift certificates, checks and coupons. The Company also protects digital information via secure cloud computing and disaster recovery services. Furthermore, DSS uses its extensive knowledgebase to provide comprehensive brand protection solutions to its customers. From risk analysis and vulnerability assessment, to systems integration and monitoring, DSS offers the advanced tools and knowledgebase needed to protect the world’s most valuable and at-risk brands. DSS’s customized solutions are designed to protect against product diversion, counterfeit, and other costly and damaging occurrences. In addition, DSS offers commercial printing services.
For more information on DSS and its subsidiaries, please visit www.DSSsecure.com .

Follow DSS on Facebook, click HERE.

For more information:

BPC Financial Marketing
John Baldissera
800-368-1217
Email: ir@documentsecurity.com

Safe Harbor Statement
The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbors created thereby. These forward-looking statements include, but are not limited to, statements regarding expectations for future financial performance, potential sales from new and existing customers, expected benefits from the Company's cost cutting efforts and/or statements preceded by, followed by or that include the words “believes,” “could,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” or similar expressions, all of which involve uncertainty and risk. Many of these risks and uncertainties are discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission (the “SEC”), and in any subsequent reports filed with the SEC, all of which are available at the SEC’s website at www.sec.gov. It is possible the company's future financial performance may differ from expectations due to a variety of factors including, but not limited to, the risks referred to above, and changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among its competitors and customers, technology advancements, unexpected costs and charges, adequate funding for plans, changes in interest and foreign exchange rates, regulatory and other approvals and failure to implement all plans, for whatever reason. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on current conditions; expected future developments and other factors it believes are appropriate in the circumstances. Prospective investors are cautioned that such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The company makes no commitment to update any forward-looking statement included herein, or disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.

TABLES AVAILABLE IN FULL PDF FILE.