Image Sensing Systems Purchases Assets of EIS and Announces Expanded Strategy



    
    Acquisition Brings ISS Leading Radar-Based Traffic Detection Product

    Complementary technology first step towards 'hybrid' offerings and
    addressing adjacent markets
    

    SAINT PAUL, Minn., Dec. 6 /CNW/ -- Image Sensing Systems, Inc. ("ISS" or
the "Company") (Nasdaq:   ISNS) announced today that it has purchased selected
assets from EIS Electronic Integrated Systems Inc. (EIS), including EIS'
market leading RTMS(TM) (Remote Traffic Microwave Sensor) radar product line,
for initial consideration of $10.9 million in cash and 147,202 shares of ISS
common stock (valued at $2.5 million as of yesterday's closing price).  In
addition, EIS has a three-year earn-out agreement based on the performance of
the purchased assets where, if performance is at the target level, EIS would
receive an additional $6 million in cash.  ISS has established a line of
credit with its bank to fund $5 million of the cash consideration.
    
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20050512/CGISSLOGO)
    
    ISS expects the acquisition will be accretive to 2008 earnings.  Although
ISS is still evaluating the purchase accounting required, it anticipates
recording a significant expense in the current quarter for acquired in-process
research and development related to the purchased assets.  Substantially all
EIS employees are expected to join ISS, including its founder and president,
Dan Manor.  EIS had approximately $8.0 million in revenue in its fiscal 2006.
    Mr. Manor said, "EIS' shareholders and managers are thrilled to join up
with ISS.  We view it as a win-win combination of technologies that are
complementary in nature.  Both companies have a global presence and brands
that stand for quality.  We couldn't ask for a better partner to assist in the
move from our third generation to fourth generation technology.  The RTMS G4,
which is expected to be commercially available early in 2008, will be the most
advanced radar traffic sensor on the market.  This partnership is the logical
next step in expanding toward systems solutions for traffic information and
congestion management."
    Ken Aubrey, CEO of ISS, said, "We couldn't be more excited to acquire the
leading radar product and to add the talented EIS group to our team.  We share
similar histories and culture -- both pioneering our respective technologies
and driving the market."
    
    Strategy Expansion
    
    Mr. Aubrey continued, "Our core competency is computer enabled detection
(CED) which we define as a group of technologies in which software, rather
than humans, examines the outputs of complex sensors to determine what's
happening in the field of view in real-time.  The key element in CED is
complex algorithms that analyze the signal from the sensor and then pass
information along to management systems, controllers or directly to users.
With this acquisition we can provide the RTMS radar based CED in addition to
our existing Autoscope(R) machine-vision CED offering."
    "Also, now that our product portfolio contains both video and radar
detection, we can accelerate work on combining the best of video and radar to
create a hybrid offering that doesn't exist in the market today.  The
advantage of hybrid technology is that one sensor type can compensate for the
limitations of the other sensor giving the potential for detection performance
well above what can be achieved with one sensor alone.  Additionally, the
hybrid product can be made with an incrementally smaller cost than using two
independent sensor types."
    "We will continue to leverage our strength in Intelligent Transportation
Systems (ITS) to capture increased market share in this fast growing
world-wide market.  We also believe that our skills in CED and a hybrid
offering will make our products increasingly attractive in ITS and adjacent
markets.  Ultimately, we see a convergence of ITS, security and environmental
markets and we aim to be well positioned to be a leading provider of CED
components to management systems providers.  We will do this through continued
internal development and selected product and channel acquisition strategies."
    Image Sensing Systems, Inc. (Nasdaq:   ISNS) is a technology company
specializing in software based detection solutions for the Intelligent
Transportation Systems (ITS) sector and adjacent overlapping markets.  Our
industry leading computer enabled detection (CED) products, including the
Autoscope(R) machine-vision family and the RTMS(TM) radar family, combine
embedded software signal processing with sophisticated sensing technologies
for use in transportation and safety/surveillance management.  CED is a group
of technologies in which software, rather than humans, examines the outputs of
complex sensors to determine what is happening in the field of view in
real-time.  With more than 80,000 instances sold in over 60 countries
worldwide, our depth of experience coupled with breadth of product portfolio
uniquely positions us to provide powerful hybrid technology solutions and to
exploit the convergence of the traffic, security and environmental management
markets.  We are headquartered in St. Paul, Minnesota.  Visit us on the web at
imagesensing.com.
    Safe Harbor Statement: Statements made in this release concerning the
Company's or management's intentions, expectations, or predictions about
future results or events are "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.  Such statements
reflect management's current expectations or beliefs, and are subject to risks
and uncertainties that could cause actual results or events to vary from
stated expectations, which variations could be material and adverse.  Factors
that could produce such a variation include, but are not limited to, the
following: the inherent unreliability of earnings, revenue and cash flow
predictions due to numerous factors, many of which are beyond the Company's
control; developments in the demand for the Company's products and services;
relationships with the Company's major customers and suppliers; unanticipated
delays, costs and expenses inherent in the development and marketing of new
products and services; the impact of governmental laws and regulations; and
competitive factors. Our forward-looking statements speak only as of the time
made, and we assume no obligation to publicly update any such statements.
Additional information concerning these and other factors that could cause
actual results and events to differ materially from the Company's current
expectations are contained in the Company's reports and other documents filed
with the Securities and Exchange Commission, including its Form 10-K for the
year ended December 31, 2006.




For further information:

For further information: Greg Smith, Chief Financial Officer of Image 
Sensing Systems, Inc., +1-651-603-7700 Web Site: http://www.imagesensing.com

Organization Profile

IMAGE SENSING SYSTEMS, INC.

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EIS ELECTRONIC INTEGRATED SYSTEMS INC.

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