Carlsbad, CA (August 1, 2006) -- Document Sciences Corporation, a global leader in providing customer communications management solutions, today reported revenues of $8.5 million for the quarter ended June 30, 2006, a record for the company and an increase of 8% over revenues of $7.9 million for the quarter ended June 30, 2005. Net income for the quarter ended June 30, 2006, was $144,000 compared with net income of $340,000 for the quarter ended June 30, 2005. Net income per share for the quarter ended June 30, 2006, was $0.03 based on 5,372,663 diluted shares outstanding, compared with net income per share of $0.06, based on 5,341,281 diluted shares outstanding for the quarter ended June 30, 2005. For the six months ended June 30, 2006, revenues were $16.2 million, compared with revenues of $14.1 million for the same period in 2005, representing an increase of 15%. For the six months ending June 30, 2006, the company reported a net loss of $315,000, or $0.07 per share based on 4,235,085 shares outstanding, compared with a net loss of $258,000, or $0.06 per share based on 4,113,391 shares outstanding, for the six months ending June 30, 2005. Jack McGannon, Document Sciences' President and CEO, stated that "we are pleased that this quarter we have reported record company quarterly revenues. Additionally, this represents the eighth consecutive quarter of year-over-year quarterly revenue growth." McGannon added that "through the first six months of the year we have enjoyed growth in both License Fees and Services. First half revenue from License Fees has grown by 12% while revenue from Services is up by 21%." McGannon noted that "quarterly Services revenue exceeded $3 million for first time in company history and that the Services margin improved to 22% as we realized the return on investments we made over the last two quarters to hire and train additional resources." McGannon further stated that "our financial condition remains healthy. Our cash and short-term investments balances, which were $6.6 million at June 30, 2006, declined by $1.3 million from year end balances, largely reflecting typical seasonality related to the timing of annual support fee payments and payments of accrued compensation. Our Receivables continue to grow in concert with revenue and are up by nearly $1 million since the end of last year. Additionally, deferred revenue remains significant, with a balance of nearly $14 million at the end of the second quarter." The results for the first and second quarter of 2006 reflect the Company's decision last year to revise its policy on the timing of revenue recognition for annually renewable term license agreements and professional services bundled with these agreements. Also included in expenses for the three and six months ended June 30, 2006 are $122,000 and $209,000, respectively, of stock-based compensation expenses, including $64,000 and $92,000, respectively, resulting from the adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), Share-Based Payment.