SANTA ANA, Calif., July 3 /PRNewswire-FirstCall/ -- TROY Group Inc. (OTC:TROY) today announced that financial results for the second quarter of fiscal year 2006, which ended May 31, 2006, have been posted on the company's Web site at http://www.troygroup.com/. To access the report, click on About TROY Group then click on Financials. TROY's second quarter 2006 results are also posted at http://www.pinksheets.com/. Enter TROY in the symbol field then click on Financial Report. Earnings from continuing operations for the second fiscal quarter ended May 31, 2006 were $0.10 per share. Earnings for the six months ended May 31, 2006 from continuing operations were $0.22 per share and discontinued operations including the gain on disposal of the Wireless and Connectivity Solutions business were $0.47 per share. Summary financial data following TROY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts) Three Months Ended Six Months Ended May 31, May 31, May 31, May 31, 2006 2005 2006 2005 Net sales $11,546 $10,039 $23,291 $19,585 Cost of goods sold 6,450 6,138 13,300 11,959 Gross profit 5,096 3,901 9,991 7,626 Operating expenses: Selling, general and administrative 2,822 2,460 5,346 5,167 Research and development 720 696 1,418 1,513 Amortization of intangible assets -- 19 10 38 Total operating expenses 3,542 3,175 6,774 6,718 Operating income 1,554 726 3,217 908 Interest income 186 71 399 128 Income from continuing operations before income taxes 1,740 797 3,616 1,036 Provision for income taxes 661 302 1,374 392 Income from continuing operations 1,079 495 2,242 644 Loss from discontinued operations, net of tax -- (366) (44) (367) Gains on disposal of discontinued operations, net of tax -- -- 4,984 -- Discontinued operations, net of tax -- (366) 4,940 (367) Net income $1,079 $129 $7,182 $277 Net income per share: Basic income from continuing operations $0.10 $0.04 $0.22 $0.06 Basic income (loss) from discontinued operations -- (0.03) 0.47 (0.03) Basic income 0.10 0.01 0.69 0.03 Diluted income from continuing operations 0.10 0.04 0.21 0.06 Diluted income (loss) from discontinued operations -- (0.03) 0.47 (0.03) Diluted income 0.10 0.01 0.68 0.03 Weighted average shares outstanding: Basic 10,468 10,640 10,458 10,640 Diluted 10,518 10,640 10,490 10,640 TROY GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) Assets May 31, November 30, 2006 2005 (unaudited) Current assets: Cash and cash equivalents $51 $492 Investment in available-for-sale securities 15,750 12,600 Accounts receivable, net of allowance for doubtful accounts 2005 $271; 2006 $209 5,667 6,416 Inventories 3,110 3,053 Prepaid expenses and other 1,035 707 Deferred tax assets 1,166 2,525 Current assets of discontinued operations held for sale 43 3,336 Total current assets 26,822 29,129 Equipment and leasehold improvements, net 2,261 2,501 Goodwill 281 281 Other assets, including receivables from stockholders of $1,903 3,023 2,925 Non-current assets of discontinued operations held for sale -- 38 Total assets $32,387 $34,874 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $2,088 $2,236 Accrued expenses 4,761 3,439 Deferred revenue 1,888 1,422 Current liabilities of discontinued operations held for sale 487 1,667 Total current liabilities 9,224 8,764 Commitments and contingencies Stockholders' equity: Preferred stock, no par value, authorized 100,000 shares; issued none Common stock, par value $0.01 per share; authorized 13,000,000 shares; issued 2005 10,639,877 shares; issued 2006 10,468,367 shares 105 107 Additional paid-in capital 19,743 19,913 Retained earnings 3,236 6,523 Accumulated other comprehensive income 79 59 Less cost of treasury stock - 2005 201,510 shares -- (492) Total stockholders' equity 23,163 26,110 Total liabilities and stockholders' equity $32,387 $ 34,874 About TROY Group TROY Group, Inc. ("TROY") is a worldwide provider of secure payment solutions. Our security printing solutions include application software, high security check printing hardware and specialized consumables for secure printing and payment applications. Our ACH (Automated Clearing House) software includes ACH processing and origination software and consulting services. We sell and service our products to major corporations, banks, key government accounts and distributors worldwide. Visit TROY at http://www.troygroup.com/. Forward-looking statements of TROY (statements that are not historical fact) in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as believe, expect, may, will, could and should, and the negative of these terms or other similar expressions. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, but, are not limited to, the ability to develop new products, the ability to hire and retain qualified management, technology and other personnel, the impact of competition from existing and new technologies and companies and the other factors set forth in our periodic reports and other documents that we distribute from time to time which are available in our financial statements under certain important factors on our website TROYgroup.com or pinksheets.com. Statements included in this news release are based upon information known to TROY as of the date of this release, and TROY assumes no obligation to update information contained in this news release. For More Information Contact: TROY Group Inc. 2331 South Pullman Street Santa Ana, CA 92705 (949) 250-3280 (949) 250-8972 Facsimile http://www.troygroup.com/ Contact: Dennis C. Fairchild, Vice President & CFO DATASOURCE: TROY Group Inc. CONTACT: Dennis C. Fairchild, Vice President & CFO of TROY Group Inc., +1-949-250-3280, or fax, +1-949-250-8972 Web site: http://www.troygroup.com/

Copyright