ROCHESTER, N.Y., – Document Security Systems, Inc., a world-wide developer and manufacturer of security and authentication solutions which prevent counterfeiting and brand fraud, reported results for the second quarter ended June 30, 2011.  Management will host a teleconference and web cast today at 4:15 pm ET to discuss the results with the investment community:

A replay of the teleconference will be available until August 29, 2011, which can be accessed by dialing (877) 660-6853 if calling within the U.S. or (201) 612-7415 if calling internationally.  Please enter account #286 and conference ID #377482 to access the replay.  The webcast will be available for replay within the Investor Relations "Events & Presentations" section of the DSS home page located at www.DSSsecure.com.

Second Quarter 2011 Highlights

• Sales of $2.9 million up 7% from first quarter of 2011, down 14% from the second quarter 2010.
• Gross margin percentage of 28% from 26% in the second quarter of 2010.
• Operating expenses increased 13% from the first quarter of 2011, up 8% from the second quarter 2010. The bulk of this increase was due to an increase in sales and marketing related expenses, the acquisition of a cloud computing company called Extradev, Inc. and a major re-branding project the company recently completed.
• Net loss of $1,112,000, an increase of 12% from the second quarter of 2010.
• Net loss per share of $(0.06), flat with the net loss per share in the second quarter of 2010.

First Half 2011 Highlights

• Sales of $5.6 million down 9% from the first half of 2010.
• Gross profit up 1% from the first half of 2010.
• Gross margin percentage of 31% from 28% in the first half of 2010.
• Operating expenses decreased 5% from the first half of 2010.
• Net loss of $1,510,000, a decrease of 29% from the first half of 2010 loss.
• Net loss per share of $(0.08) compared to $(0.12) in the first half of 2010.

Patrick White, DSS's CEO, stated: "Unfortunately, the positive 2nd quarter results from four of our five operating divisions were overshadowed by the continuing struggles in our non-core commercial printing unit, and expense increases from a front loading of sales and marketing costs and costs associated with our successful re-branding project we completed during the quarter.  We are excited about the solid financial performances of our core business divisions (security licensing and printing, plastics, packaging and digital) achieved during the quarter.

"It is important to note that Management is weighing certain options for the non-core commercial printing component of our business.

"Furthermore, during the second quarter we formed our new Digital Division based on our acquisition of Extradev, Inc. which joined DSS in the second quarter.  This new group adds an exciting new business line to our Company as it provides a delivery system for our various digital security products.  Our targeted sales and marketing efforts, including the launch during the second quarter of our new marketing identity, logo and website, has allowed DSS to make inroads with potentially significant customers, as well as increased our recognition in the industry.  The opportunities that exist for our security products continue to be immense, and we are confident that we are very well positioned to capitalize on the opportunities."