COSTA MESA, Calif., July 16 /PRNewswire-FirstCall/ -- TROY Group, Inc. (OTC Pink Sheets: TROY) today announced that financial results for the second quarter of fiscal year 2007 which ended May 31, 2007, 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 2007 financial results are also posted at http://www.pinksheets.com/. Enter TROY in the symbol field then click on Financial Report. Revenue for the three months ended May 31, 2007 increased to $11.8 million compared to revenue for the three months ended may 31, 2006 of $11.5 million. Earnings from continuing operations for the three months ended May 31, 2007 were $0.08 per share compared to earnings from continuing operations for the three months ended May 31, 2006 of $0.10 per share. Revenue for the six months ended May 31, 2007 increased to $25.0 million compared to revenue for the six months ended May 31, 2006 of $23.3 million. Earnings from continuing operations for the six months ended May 31, 2007 were $0.19 per share compared to earnings from continuing operations for the six months ended May 31, 2006 of $0.22 per share. For further analysis and detail see the above sites. Financial Data Summary Following TROY GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited) (in thousands, except per share amounts) Three Months Six Months Ended Ended May 31, May 31, May 31, May 31, 2007 2006 2007 2006 Net sales $ 11,840 $ 11,546 $ 25,000 $23,291 Cost of goods sold 7,028 6,450 14,694 13,300 Gross profit 4,812 5,096 10,306 9,991 Operating expenses: Selling, general and administrative $ 2,698 2,822 5,779 5,346 Research and development 844 720 1,592 1,418 Amortization of intangible assets - - - 10 Total operating expenses 3,542 3,542 7,371 6,774 Operating income 1,270 1,554 2,935 3,217 Interest income 142 186 287 399 Income from continuing operations before income taxes 1,412 1,740 3,222 3,616 Provision for income taxes 548 661 1,200 1,374 Income from continuing operations 864 1,079 2,022 2,242 Loss from discontinued operations, net of tax - - - (44) Gains on disposal of discontinued operations, of tax - - - 4,984 Discontinued operations, net of tax - - - 4,940 Net income $ 864 $ 1,079 $ 2,022 $ 7,182 Net income per share: Basic income from continuing operations $ 0.08 $ 0.10 $ 0.19 $ 0.22 Basic income (loss) from discontinued operations - - - 0.47 Basic income $ 0.08 $ 0.10 $ 0.19 $ 0.69 Diluted income from continuing operations $ 0.08 $ 0.10 $ 0.19 $ 0.21 Diluted income (loss) from discontinued operations - - - 0.47 Diluted income $ 0.08 $ 0.10 $ 0.19 $ 0.68 Weighted average shares outstanding: Basic 10,564 10,468 10,564 10,458 Diluted 10,589 10,518 10,576 10,490 FINANCIAL STATEMENTS TROY GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) Assets May 31, November 30, 2007 2006 (unaudited) Current assets: Cash and cash equivalents $ 103 $ 350 Investment in available-for-sale securities 12,000 9,650 Accounts receivable, net of allowance for doubtful accounts 2007 $293; 2006 $322 6,455 5,788 Inventories 3,992 3,980 Prepaid expenses and other 992 917 Deferred tax assets 821 874 Total current assets 24,363 21,559 Equipment and leasehold improvements, net 1,901 2,126 Goodwill 281 281 Other assets, including receivables from stockholders of $1,903 2,870 3,324 Total assets $ 29,415 $ 27,290 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 3,359 Accrued expenses 2,142 3,171 Deferred revenue 3,098 1,994 Total current liabilities 8,599 9,475 Long-term liability 332 - 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 10,563,701 shares 106 106 Additional paid-in capital 21,157 20,510 Retained earnings (deficit) (779) (2,801) Total stockholders' equity 20,484 17,815 Total liabilities and stockholders' equity $ 29,415 $ 27,290 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. TROY Group, Inc. 3535 Hyland Ave., Suite 200 Costa Mesa, CA 92626 (714) 241-4760 (714) 241-4762 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., +1-714-241-4760 Web site: http://www.troygroup.com/ http://www.pinksheets.com/

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