Exhibit 99.1





| | 500 Spruce Tree Centre
1600 University Avenue West
St. Paul, Minnesota 55104-3825 USA
651.603.7700 Fax: 651.603.7795
www.imagesensing.com
| | -----------------------------------------------------------------------------------------------------------------------------------------



NEWS RELEASE



|Contact: | Greg Smith, Chief Financial Officer
|-------- | -----------------------------------

Image Sensing Systems, Inc. Phone: 651.603.7700



FOR IMMEDIATE RELEASE



Image Sensing Systems Announces Fifth Consecutive Year of Record Financial Results



Saint Paul, Minn., February 22,
2007  Image Sensing Systems, Inc. (ISS) (NASDAQ: ISNS) announced today that its net income for fiscal
year 2006 was $3.1 million or $.83 per share ($.80 per diluted share) versus net income of $2.8 million or $.79 per share ($.73
per diluted share) for 2005. Net income for the fourth quarter of 2006 was $1.2 million or $.30 per share ($.30 per diluted share)
versus net income of $689,000 or $.19 per share ($.18 per diluted share) for the comparable period in 2005. The fourth quarter of
2006 marks the nineteenth consecutive quarter of profitability for the company.



For fiscal year 2006, revenue was $13.1 million compared to $11.0 million in fiscal year 2005, an increase of 19%.  Royalty income from sales in North America was $10.1 million in 2006 compared to $8.6 million in 2005, while international sales were $3.0 million compared to $2.4 million in 2005. The Companys North American distributor achieved double-digit sales growth on our products as it has every year since 2001. Additionally, the Companys Asian subsidiary delivered improved results, more than doubling sales compared to a difficult 2005 year.



For the fourth quarter of 2006, revenue was $4.1 million versus $2.9 million for the comparable period in 2005, an increase of 43%. For the quarter, royalty income from sales in North America was $2.8 million in 2006 compared to $2.1 million in 2005, while international sales were $1.3 million compared to $761,000 in 2005. Revenue in all of the Companys units increased by more than 25% over the similar quarter in 2005.



Due to making significant investments in its next generation Autoscope product line, the Companys research and development expense increased in 2006 by $1.1 million over 2005. Also, other income decreased in 2006 versus 2005 due to the $375,000 legal settlement with the Companys North American distributor. Partially offsetting these expenses, the Companys

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effective income tax rate was 23% in
2006 compared to 35% in 2005 due to the recognition of a number of federal and state tax adjustments and credits.



Jim Murdakes, Chairman and CEO,
commented, We posted solid fourth quarter results across all three markets with our North American distributor Econolite
(ECPI) leading the way. Despite the expenses associated with the ECPI settlement and with our accelerated technical effort on
Autoscope, we were still able to exceed last years results. More importantly, we are now well positioned to introduce a
number of enhanced products in the first half of 2007 that we believe leapfrog the competition and which could serve to drive
further revenue growth. With the combination of our strong financial results and balance sheet, the newly announced executive
team, strategic partners and advanced technology, ISS is ready to continue its leadership in the Intelligent Traffic Systems
market.



Headquartered in St. Paul,
Minnesota, Image Sensing Systems, Inc. combines expertise in image processing, hardware and software engineering and
communications to develop Autoscope® video detection systems for advanced traffic management and control applications. With
equipment supplied for over 50,000 cameras in more than 55 countries, we are a global leader in video detection for management and
safety systems for highways, bridges, tunnels and intersections. Autoscope products provide transportation managers the means to
reduce roadway congestion, improve safety and security, gain cost efficiencies and assist in roadway planning.



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, 2005.

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Image Sensing Systems, Inc.

Condensed Statement of Income

(in thousands, except per share information)

(unaudited)





Three Months EndedDecember 31
        
        Year EndedDecember 312006
        
        2005
        
        2006
        
        2005RevenueRoyalty income
        
        $
        2,854
        
        $
        2,127
        
        $
        10,136
        
        $
        8,595International sales
        
        
        1,271
        
        
        761
        
        
        2,980
        
        
        2,4074,125
        
        
        2,888
        
        
        13,116
        
        
        11,002Cost of revenueRoyalty fee
        
        
        
        
        
        95
        
        
        220
        
        
        383Cost of sales
        
        
        748
        
        
        389
        
        
        1,501
        
        
        1,042748
        
        
        484
        
        
        1,721
        
        
        1,425Gross profit
        
        
        3,377
        
        
        2,404
        
        
        11,395
        
        
        9,577Operating expensesSelling, marketing and product support
        
        
        755
        
        
        678
        
        
        2,850
        
        
        2,567General and administrative
        
        
        458
        
        
        329
        
        
        2,007
        
        
        1,400Research and development
        
        
        1,057
        
        
        449
        
        
        2,639
        
        
        1,5162,270
        
        
        1,456
        
        
        7,496
        
        
        5,483Income from operations
        
        
        1,107
        
        
        948
        
        
        3,899
        
        
        4,094Other income
        
        
        168
        
        
        80
        
        
        148
        
        
        252Income before income taxes
        
        
        1,275
        
        
        1,028
        
        
        4,047
        
        
        4,346Income taxes
        
        
        115
        
        
        339
        
        
        942
        
        
        1,505Net income
        
        $
        1,160
        
        $
        689
        
        $
        3,105
        
        $
        2,841Net income per common shareBasic
        
        $
        0.30
        
        $
        0.19
        
        $
        0.83
        
        $
        0.79Diluted
        
        $
        0.30
        
        $
        0.18
        
        $
        0.80
        
        $
        0.73Weighted average shares outstandingBasic
        
        
        3,745
        
        
        3,681
        
        
        3,725
        
        
        3,602Diluted
        
        
        3,902
        
        
        3,878
        
        
        3,891
        
        
        3,868


















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Image Sensing Systems, Inc.

Condensed Balance Sheet

(in thousands)

(unaudited)



December 31,2006
        
        December 31,2005AssetsCurrent assetsCash and cash equivalents
        
        $
        11,626
        
        $
        9,006Investments
        
        
        4,100
        
        
        2,300Receivables
        
        
        2,957
        
        
        3,514Inventories
        
        
        670
        
        
        312Prepaid expenses and deferred taxes
        
        
        319
        
        
        11819,672
        
        
        15,250Property and equipment, net
        
        
        522
        
        
        329Goodwill and capitalized software development costs, net
        
        
        1,050
        
        
        1,212$
        21,244
        
        $
        16,791Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable and accrued expenses
        
        $
        1,652
        
        $
        923Income taxes payable
        
        
        231
        
        
        941,883
        
        
        1,017Deferred income taxes
        
        
        28
        
        
        52Shareholders equity
        
        
        19,333
        
        
        15,722$
        21,244
        
        $
        16,791




















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Image Sensing Systems, Inc.

Condensed Statement of Cash Flows

(in thousands)

(unaudited)





Year EndedDecember 312006
        
        2005Operating activitiesNet income
        
        $
        3,105
        
        $
        2,841Adjustments to reconcile net income to net cash provided by operationsDepreciation and amortization
        
        
        388
        
        
        379Stock option expense and tax benefits
        
        
        290
        
        
        445Changes in operating assets and liabilities
        
        
        856
        
        
        (1,255
        )Net cash provided by operating activities
        
        
        4,639
        
        
        2,410Investing activitiesPurchase of property and equipment
        
        
        (419
        )
        
        (323
        )Maturities (purchases) of investments, net
        
        
        (1,800
        )
        
        5,000Net cash provided by (used in) investing activities
        
        
        (2,219
        )
        
        4,677Financing activity  proceeds from exercise of stock options
        
        
        200
        
        
        657Increase (decrease) in cash and cash equivalents
        
        
        2,620
        
        
        7,744Cash and cash equivalents, beginning of year
        
        
        9,006
        
        
        1,262Cash and cash equivalents, end of year
        
        $
        11,626
        
        $
        9,006


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