# Exhibit 99.1

| | 500 Spruce Tree Centre1600 University Avenue WestSt. Paul, Minnesota 55104-3825 USA651.603.7700 Fax:  651.603.7795www.imagesensing.com
| | --------------------------------------------------------------------------------------------------------------------------------------

# NEWS RELEASE

|Contacts: |  | Art Bourgeois, Chief Financial Officer
Image Sensing Systems, Inc. Phone: 651.603.7700
|--------- |  | --------------------------------------------------------------------------------------

# Image Sensing Systems Announces Fourth Consecutive Year of Record Financial Results

Saint Paul, Minn., February 20, 2006 Image Sensing Systems,
Inc. (ISS) (NASDAQ Small Cap: ISNS) announced today that its net income for 2005 was a $2,841,000 or $.79 per share ($.73 per
diluted share) versus net income of $2,694,000 or $.79 per share ($.71 per diluted share) for 2004. Net income for the fourth
quarter was $689,000 or $.19 per share ($.18 per diluted share), versus net income of $418,000 or $.12 per share ($.11 per diluted
share) for the comparable period in 2004. The fourth quarter of 2005 marks the fifteenth consecutive quarter of profitability for
the company.

Revenues for fiscal year 2005 were $11,002,000, compared to $10,830,000 in
fiscal year 2004. Royalty income from sales in North America was $8,595,000, compared to $7,521,000 in 2004, while international
sales were $2,407,000, compared to $3,309,000 in 2004. Sales of Autoscope products by the Companys North American
distributor continued to show double-digit sales growth in the fourth quarter and ended the year with 14% growth over 2004.
International sales for the fourth quarter were $761,000, an increase of 77% from $429,000 in the comparable quarter of 2004, but
decreased to $2,407,000 in 2005 from $3,309,000 in 2004. Sales by the Companys European subsidiary for both the fourth
quarter and fiscal year showed a significant increase over 2004, while its Asian subsidiary continued to have difficulty selling
product which impacted both consolidated revenues and profitability. While disappointed with sales results of the Asian
subsidiary, the Companys continued sales growth in North America and Europe, has positioned its Autoscope products as the
leader in those markets. The Company has taken remedial steps, and continues to do so, to turn around the Asian market position.

Jim Murdakes, Chairman and CEO commented, We were very pleased with our
continued positive financial results for the year and quarter as we registered our 15th consecutive quarter of profitability.
Econolite Control Products, Inc., our North American distributor, had an outstanding year selling our Autoscope products and
continued to increase market share in this market. Our European subsidiary also had an exceptional year selling Autoscope products
while maintaining profitability even while expanding our territory into Eastern Europe. In Asia we are taking steps to

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compete more aggressively in this fast growing market, and plan further
technical, sales, manufacturing and organizational efforts to re-establish Autoscope market leadership there. We believe our
strong financial position along with our commitment to advanced technology will allow ISS to continue its global market leadership
and profitability and are hopeful that all three market segments will contribute to revenue growth and earnings in 2006.

Headquartered in St. Paul, Minnesota, Image Sensing Systems, Inc. combines
expertise in image processing, hardware and software engineering and communications to develop video vehicle detection systems for
traffic management and control applications. The Autoscope vehicle detection system is the world leader in video detection for
advanced traffic management systems for highways, tunnel incident detection, intersection control, and traffic data collection.
The Autoscope system provides traffic managers the means to reduce roadway congestion, improve roadway planning and improve cost
efficiencies.

| | Safe Harbor Statement:   Statements made in this release
concerning the Companys or managements intentions, expectations, or predictions about future results or events are
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements
reflect managements current expectations or beliefs, and are subject to risks and uncertainties that could cause actual
results or events to vary from stated expectations, which variations could be material and adverse. Factors that could produce
such a variation include, but are not limited to, the following: the inherent unreliability of earnings, revenue and cash flow
predictions due to numerous factors, many of which are beyond the Companys control; developments in the demand for the
Companys products and services; relationships with the Companys major customers and suppliers; unanticipated delays,
costs and expenses inherent in the development and marketing of new products and services; the impact of governmental laws and
regulations; and competitive factors. Our forward-looking statements speak only as of the time made, and we assume no obligation
to publicly update any such statements. Additional information concerning these and other factors that could cause actual results
and events to differ materially from the Companys current expectations are contained in the Companys Form 10-KSB for
the year ended December 31, 2004.
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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Image Sensing Systems, Inc.
Condensed Statement of Income
(in thousands, except per share information):

|                                       | Three-Month PeriodsEnded December 31 |  | Years EndedDecember 31
|-------------------------------------- | ------------------------------------ |  | ----------------------
|
|Revenue                                |                                      |  |                       
|Royalty income                         |                                      |  | $                     
|International sales                    |                                      |  |                       
|                                       |                                      |  |                       
|                                       |                                      |  |                       
|Cost of revenue                       
|Royalty fee                            |                                      |  |                       
|Cost of sales                          |                                      |  |                       
|                                       |                                      |  |                       
|                                       |                                      |  |                       
|                                       |                                      |  |                       
|Gross profit                           |                                      |  |                       
|Operating expenses                     |                                      | 
|Selling, marketing and product support |                                      |  |                       
|General and administrative             |                                      |  |                       
|Research and development               |                                      |  |                       
|                                       |                                      |  |                       
|                                       |                                      |  |                       
|                                       |                                      |  |                       
|Income from operations                 |                                      |  |                       
|Other income                           |                                      |  |                       
|                                       |                                      |  |                       
|Income before income taxes             |                                      |  |                       
|Income taxes                           |                                      |  |                       
|                                       |                                      |  |                       
|                                      
|Net income                             |                                      |  | $                     
|                                       |                                      |  |                       
|Net income per common share            |                                      | 
|Basic                                  |                                      |  | $                     
|Diluted                                |                                      |  | $                     
|                                      
|Weighted average shares outstanding   
|Basic                                  |                                      |  |                       
|Diluted                                |                                      |  |                       

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Image Sensing Systems, Inc.
Condensed Balance Sheet
(in thousands)

|                                                         | December 31,2005 |  | December 31,2004
|-------------------------------------------------------- | ---------------- |  | ----------------
|Assets                                                   |                  |  |                 
|Current assets                                           |                  | 
|Cash and cash equivalents                                |                  |  | $               
|Investments                                              |                  |  |                 
|Receivables                                              |                  |  |                 
|Inventories                                              |                  |  |                 
|Prepaid expenses and deferred taxes                      |                  |  |                 
|                                                         |                  |  |                 
|                                                         |                  |  |                 
|Property and equipment, net                              |                  |  |                 
|Goodwill and capitalized software development costs, net |                  |  |                 
|                                                         |                  |  |                 
|                                                         |                  |  | $               
|                                                         |                  |  |                 
|Liabilities and Shareowners Equity                      |                  | 
|Current liabilities                                     
|Accounts payable and accrued expenses                    |                  |  | $               
|Income taxes payable                                     |                  |  |                 
|                                                         |                  |  |                 
|                                                         |                  |  |                 
|Deferred income taxes                                    |                  |  |                 
|Shareholders equity                                     |                  |  |                 
|                                                         |                  |  |                 
|                                                         |                  |  | $               
|                                                         |                  |  |                 

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Image Sensing Systems, Inc.
Condensed Statement of Cash Flows
(in thousands)

|                                                                       | Years EndedDecember 31
|---------------------------------------------------------------------- | ----------------------
|
|Operating activities                                                   |                       
|Net income                                                             |                       
|Adjustments to reconcile net income to net cash provided by operations
|Depreciation and amortization                                          |                       
|Changes in operating assets and liabilities                            |                       
|                                                                       |                       
|Net cash provided by operating activities                              |                       
|                                                                      
|Investing activities                                                  
|Purchase of property and equipment                                     |                       
|Maturities (purchases) of investments, net                             |                       
|                                                                       |                       
|Net cash provided by (used in) investing activities                    |                       
|                                                                      
|Financing activity  proceeds from exercise of stock options           |                       
|                                                                       |                       
|                                                                      
|Increase (decrease) in cash and cash equivalents                       |                       
|Cash and cash equivalents, beginning of year                           |                       
|                                                                       |                       
|Cash and cash equivalents, end of year                                 |                       
|                                                                       |                       

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