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 Third Quarter Financial Results



Saint Paul, Minn., October 23, 2007-- Image Sensing Systems, Inc. (ISS) (NASDAQ: ISNS) announced today that its net income for the quarter ended September 30, 2007 was $1.3 million ($0.34 per diluted share) compared to net income of $731,000 ($0.19 per diluted share) for the same period in 2006. Net income for the first nine months of 2007 was $2.6 million ($0.66 per diluted share) compared to $1.9 million ($0.50 per diluted share) for the same period in 2006.



Revenue for the third quarter was
$4.2 million compared to $3.0 million for the same period in 2006, while revenue for the first nine months of 2007 was $9.9
million compared to $9.0 million for the same period a year ago. Revenue from royalty income increased 17% to $3.0 million in the
quarter from $2.6 million in the third quarter of 2006 and to $7.6 million in the first nine months from $7.3 million in the first
nine months of 2006. International sales increased 187% to $1.1 million in the quarter from $398,000 for the same quarter in 2006
and increased to $2.2 million in the first nine months from $1.7 million in the same period of 2006. The revenue increases reflect
growing acceptance, in both domestic and international markets, of the companys Autoscope® Terra product line announced
this past April. Operating expenses for the quarter were $2.0 million, a 19% increase from $1.7 million in the same period of
2006, while operating expenses for the first nine months increased 11% to $5.8 million from $5.2 million in the first nine months
of 2006.



Ken Aubrey, CEO, commented,
Our nine month and quarterly results for both revenue and net income were company record bests. We believe we may be
recovering some of the delayed activity related to Terra that impacted the first half of the year. Terra products in the field
 appear to be performing well and we are pleased with the acceptance world-wide of the Terra
based Solo and Rackvision lines. We still have work left in converting our entire product line to the Terra technology and are on
schedule to do this by mid-2008.



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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-K for the year ended December 31, 2006.



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Image Sensing Systems, Inc.

Unaudited Consolidated Statement of Income

(in thousands, except per share information)



Three Months EndedSeptember 30,
        
        Nine Months EndedSeptember 30,2007
        
        2006
        
        2007
        
        2006RevenueRoyalty income
        
        $
        3,041
        
        $
        2,598
        
        $
        7,636
        
        $
        7,282International sales
        
        
        1,143
        
        
        398
        
        
        2,232
        
        
        1,7094,184
        
        
        2,996
        
        
        9,868
        
        
        8,991Cost of revenueRoyalty fee
        
        
        
        
        
        1
        
        
        
        
        
        220Cost of sales
        
        
        536
        
        
        208
        
        
        951
        
        
        753536
        
        
        209
        
        
        951
        
        
        973Gross profit
        
        
        3,648
        
        
        2,787
        
        
        8,917
        
        
        8,018Operating expensesSelling, marketing and product support
        
        
        749
        
        
        681
        
        
        2,310
        
        
        2,095General and administrative
        
        
        710
        
        
        416
        
        
        1,832
        
        
        1,549Research and development
        
        
        553
        
        
        590
        
        
        1,681
        
        
        1,5822,012
        
        
        1,687
        
        
        5,823
        
        
        5,226Income from operations
        
        
        1,636
        
        
        1,100
        
        
        3,094
        
        
        2,792Other income (expense)
        
        
        149
        
        
        (42
        )
        
        429
        
        
        (20
        )Income before income taxes
        
        
        1,785
        
        
        1,058
        
        
        3,523
        
        
        2,772Income taxes
        
        
        488
        
        
        327
        
        
        968
        
        
        827Net income
        
        $
        1,297
        
        $
        731
        
        $
        2,555
        
        $
        1,945Net income per common shareBasic
        
        $
        0.35
        
        $
        0.20
        
        $
        0.68
        
        $
        0.52Diluted
        
        $
        0.34
        
        $
        0.19
        
        $
        0.66
        
        $
        0.50Weighted average shares outstandingBasic
        
        
        3,780
        
        
        3,733
        
        
        3,777
        
        
        3,718Diluted
        
        
        3,866
        
        
        3,887
        
        
        3,876
        
        
        3,887




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Image Sensing Systems, Inc.

Unaudited Condensed Consolidated Balance Sheet

(in thousands)



September 30,2007
        
        December 31,2006AssetsCurrent assetsCash and cash equivalents
        
        $
        14,340
        
        $
        11,626Investments
        
        
        2,000
        
        
        4,100Receivables
        
        
        4,288
        
        
        2,957Inventories
        
        
        1,245
        
        
        670Prepaid expenses and deferred taxes
        
        
        413
        
        
        29922,286
        
        
        19,652Property and equipment, net
        
        
        396
        
        
        522Goodwill
        
        
        1,050
        
        
        1,050$
        23,732
        
        $
        21,224Liabilities and Shareholders EquityCurrent liabilitiesAccounts payable and accrued expenses
        
        $
        1,365
        
        $
        1,652Income taxes payable
        
        
        247
        
        
        2311,612
        
        
        1,883Deferred income taxes
        
        
        28
        
        
        8Shareholders equity
        
        
        22,092
        
        
        19,333$
        23,732
        
        $
        21,224




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Image Sensing Systems, Inc.

Unaudited Condensed Consolidated Statement of Cash Flows

(in thousands)



Nine Months EndedSeptember 30,2007
        
        2006Operating activitiesNet income
        
        $
        2,555
        
        $
        1,945Adjustments to reconcile net income to net cash provided by operationsDepreciation and amortization
        
        
        197
        
        
        277Stock option expense
        
        
        132
        
        
        166Changes in operating assets and liabilities
        
        
        (2,234
        )
        
        1,454Net cash provided by operating activities
        
        
        650
        
        
        3,842Investing activitiesPurchase of property and equipment
        
        
        (71
        )
        
        (325
        )Maturities (purchases) of investments, net
        
        
        2,100
        
        
        (1,800
        )Net cash provided by (used in) investing activities
        
        
        2,029
        
        
        (2,125
        )Financing activity  proceeds from exercise of stock options
        
        
        35
        
        
        93Increase in cash and cash equivalents
        
        
        2,714
        
        
        1,810Cash and cash equivalents, beginning of period
        
        
        11,626
        
        
        9,006Cash and cash equivalents, end of period
        
        $
        14,340
        
        $
        10,816


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