Image Sensing Systems Announces Third Quarter Financi...(iluted net income per share $...),Health

Weighted shares - basic 3,942 3,942

Weighted shares - diluted 4,005 4,005

GAAP Non-GAAP

basis adjustments basis

Nine months ended September 30, 2008

Revenue $18,696 $- $18,696

Cost of revenue 3,468 - 3,468

Gross profit 15,228 - 15,228

Operating expenses 10,314 (797) (1,2) 9,517

Income from operations 4,914 797 5,711

Other income, net 58 - 58

Income before income taxes 4,972 797 5,769

Income taxes 1,539 271 (3) 1,810

Net income $ 3,433 $526 $3,959

Basic net income per share $0.87 $1.01

Diluted net income per share $0.86 $0.99

Weighted shares - basic 3,933 3,933

Weighted shares - diluted 4,010 4,010

Notes to adjustments -

(1) Intangible asset amortization for the period of $192 and $576,

respectively

(2) Withdrawn offering cost expense of $221

(3) Income tax expense impact of (1) and (2) at ISS' marginal tax rate of

34%

Image Sensing Systems, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

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