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Document Security Systems, Inc (AMEX:DMC) Reports 24% Revenue Increase

Document Security Systems, Inc. (AMEX: DMC), a leader in patented protection against counterfeiting and unauthorized copying, scanning and photo imaging, has reported fiscal results for the third quarter that has ended September 30, 2007.

Revenue from continuing operations for the quarter totaled $1.4 million, up 24% when comparing this period to the continuing operation figure that was reported during the third quarter of 2006. Contributing to such a growth was a significant increase in the sales of security printing and an increase of Document’s royalty revenue. Sales of security printing increased 31% from the prior year’s quarter, showing a continuous demand for the company’s products.

Furthermore, the company’s gross profit from continuing operations for the third quarter of 2007 increased 27% to $687,000; another large increase when compared to $540,000 that was reported during the third quarter of 2006. Gross profit margin increased to 49% compared with 47% in the third quarter of 2006.

Additionally, Operating expenses for continuing operations for the third quarter was $2.6 million. Operating expenses increased 49% during this fiscal quarter, signaling rapid future company growth. This cost increase can be directly attributed to an increase in executive management and an increase in rental and related costs associated with the relocation and expansion of the Company’s plastic printing operations.

Mr. Patrick White, Chairman and CEO of Document Security Systems, commented, “The tremendous progress we have made in creating and enlarging our sales channel contributed to a solid increase in sales and continues to deliver an increasing pipeline of opportunities. In the last year, we have doubled the size of our internal, direct sales force and expanded the number of licensees and distributors. The additional ‘feet on the street’ are just beginning to translate into revenue and the size, quantity and quality of qualified opportunities we are pursuing is substantially improved.”

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