Document Security Systems Reports Fourth Quarter and Full Year 2008 Financial Results

Business Wire, March 31, 2009

”During the last two months, our new secure print sales team has met with major corporate print buyers and early indications are that they are having success. They have received requests for quotes from almost every visitation and we have received an order from a large well known consumer products company. The order was for $60,000 for a secure print product which requires our anti-counterfeiting technologies.

“Operationally during the first quarter of 2009 we successfully integrated DSS’s print operations into the DPI Secuprint facility and due to additional synergies we expect to see several cost savings in the administration expense categories,” added White. “Another positive aspect of the DPI acquisition is that we should realize margin improvement on our security printing as we bring in-house certain DSS print products that we had previously outsourced.

“The equipment upgrade at the company’s P-3 Plastic Card/Printing division is nearly complete and with this new equipment we expect to capture an increasing share of the RFID and variable data card markets. P3 is now in tests with some major integrators that have reached out to us for manufacturing in the foreign “Smart Card” and RFID space.

“Finally, we are fielding a number of inquiries about AuthentiGuard DX, our new information security software appliance product. For example, we are in preliminary discussions with an interested Federal government agency for a secure credentialing project, a college for a secure digital law admission exam and a medical records “cloud computing” company to name just a few.

“With aggressive sales initiatives underway, and our new manufacturing capacity we are well positioned to garner an increasing share of the rapidly growing anti-counterfeiting and authentication market,” concluded White.

“In 2008 we were able to achieve almost all of our strategic objectives I outlined last year,” said Chairman Robert Fagenson. “We signed a comprehensive agreement with Trebuchet Capital Partners related to our European litigation initiatives, removing financial and operational responsibility for the litigation from DMC management; we launched our Digital AuthentiGuard DX firmware. We narrowed our Adjusted EBITDA loss driven by the cost reduction initiatives taken throughout the year. And we acquired DPI, a leading commercial printer which positions us as a front runner for security print projects nationally/globally. Even with these accomplishments, in the face of a deteriorating global economy, we were unable to maintain the sales momentum of the first nine months. In response, we have continued to reduce operating costs and stepped up our sales efforts. In 2009, our goals are simple: to significantly increase revenue by aligning ourselves with major integrators, creating new secure paper and digital products and to utilize our new print manufacturing capacity, all of which should move us towards positive Adjusted EBITDA, “ concluded Fagenson.