iSECUREtrac Reports Year End 2007 Financial Results

Recurring Revenues up 13 % Over 2006 


OMAHA, Neb., March 19  /PRNewswire-FirstCall/ -- iSECUREtrac Corp. (OTC:ISEC) (BULLETIN BOARD: ISEC) , an industry leader in electronic monitoring solutions, reported total revenue for the year ending December 31, 2007 was up 9% to $8.8  million, from $8.1 million the prior year. Recurring revenue from the leasing of monitoring systems and related services was $8.4 million, up 13% from $7.4 million in 2006.

For the year ending December 31, 2007, the company reported a net loss of $7.2 million, compared to a net loss of $5.4 million for 2006.  The increase in net loss was primarily due to:

  1.  Litigation and settlement expenses related to a patent infringement
      lawsuit ($1,118,000).
      The lawsuit, brought by a competitor, alleged that certain components
      in iSECUREtrac's GPS systems infringed on their patent.  The
      settlement included a cash payment as well as equipment purchases
      which iSECUREtrac will subsequently use to generate additional
      revenue.
  2.  Restructuring of the entire executive team and senior management
      ($407,000).
      This expense is related to the recruitment and relocation of new
      executive officers and senior management as well as the severance
      costs associated with some of the departing executives.
  3.  Outside consulting expenses to ensure Sarbanes-Oxley compliance
      ($70,000).
  4.  Increased interest expense ($371,000).
      This was a result of increased borrowing from Crestpark LP, an
      affiliate of the company's largest shareholder, Sammons Enterprises,
      and the continuing use of capital leases to finance equipment
      purchases.




"Litigation and settlement costs, management restructuring and Sarbanes-Oxley added $1.6 million in expenses for 2007," said Lincoln Zehr, CFO of iSECUREtrac.  "Without these three items, our operating loss, before interest, would have been $5.1 million, an improvement compared to the operating loss of $5.3 million in 2006."

"Although our total revenue increased by 9%, our gross profit increased by 15% over 2006 as a result of a gross margin improvement of 3 points, from 56% to 59%," continued Zehr. "This was the third consecutive year of improvement in gross margin percentage."

"Overall, I am disappointed by our 2007 financial performance," stated Peter Michel, CEO of iSECUREtrac.  "We began the year with encouraging Beta tests on the System 5000, fully anticipating a national roll-out late in the second quarter.  As we deployed units in the field, we encountered a few unanticipated issues not usually discoverable in a laboratory or test environment.  These product issues were not fully resolved until November, 2007 when we were able to resume the System 5000 roll-out in volume. As a result, our increase in recurring revenue was only 13%."

"In addition," continued Michel, "we spent $1.1 million to settle a patent infringement lawsuit. Although we still firmly believe the case was without merit, a trial would have been even more costly and distracted us from our main task of growing top line revenue."

"However, it would be a mistake to ignore the significant achievements of 2007 which are not reflected in the current year's financial results," said Michel.  "During the year, we added three exceptionally qualified and talented executives to our senior management team.  We also provided additional opportunities to grow recurring revenues through services like Monitoring Center Intervention in which our staff works directly with offenders to resolve compliance issues without the involvement of supervising officers at our agency clients."

"Looking forward," concluded Michel, "the company is in a much stronger position today than at the close of 2006 to capitalize on the strengths of our new and talented executive team, the superior performance of the System 5000, increasing demand for our services and the continued robust expansion of the market."

Conference Call Information

Please join CEO Peter Michel and CFO Lincoln Zehr on Wednesday, March 19, 2008. The company will discuss year-end 2007 results and provide a company update. The details for the call are as follows:

  Date:            Wednesday, March 19, 2008
  Time:            3:30 PM Central (4:30 PM Eastern)
  Dial-in number:  1-800-762-8795
  International:   1-480-629-9041
  Conference ID#:  3857578




Dial in 5-10 minutes prior to the start time. An operator will request your name and organization and ask you to wait until the call begins. If you have any difficulty connecting, please call iSECUREtrac at 1-866-537-0022.

  A replay of the conference call will be available until March 26, 2008.

  Replay number:        1-800-406-7325
  Int'l Replay number:  1-303-590-3030
  Replay Pin Number:    3857578

  About iSECUREtrac


iSECUREtrac Corp. provides electronic monitoring systems, client management software and supplemental services for use in community supervision.  The company's rich stream of reliable data concerning a client's location, movement and status better enables effective compliance management and positive behavior modification. Visit http://www.isecuretrac.com/ for more information.

Safe Harbor

This press release contains forward-looking statements that, if not verifiable historical fact, may be viewed as forward-looking statements that could predict future events or outcomes with respect to iSECUREtrac Corp. and its business. The predictions embodied in these statements will involve risks and uncertainties and accordingly, iSECUREtrac's actual results may differ significantly from the results discussed or implied in such forward-looking statements.

                    iSECUREtrac Corp. and SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
                  Years Ended December 31, 2007 and 2006

                                              2007              2006
  ASSETS
    Current Assets
      Cash and cash equivalents            $3,442,712       $4,341,685
      Accounts receivable, net of
       allowance for doubtful accounts
        of $292,669 in 2007
        and $171,409 in 2006                1,941,902        2,284,177
      Inventories                             135,376           61,021
      Prepaid expenses and other               92,750           74,608
        Total current assets                5,612,740        6,761,491
    Leasehold improvements and
     equipment, net of accumulated
     depreciation of $7,041,272 in
     2007 and $5,251,139 in 2006            3,875,728        3,379,897
    Intangibles, net of accumulated
     amortization and impairment
     charges of $850,166 in 2007 and
     $767,598 in 2006                          61,356          143,924
    Goodwill                                2,302,179        2,302,179
    Other assets                               88,425           66,045
        Total assets                      $11,940,428      $12,653,536
  LIABILITIES AND STOCKHOLDERS' (DEFICIT)
    Current Liabilities
      Current maturities of long-
       term debt                             $622,340         $891,070
      Accounts payable                      1,069,577          457,481
      Accrued expenses                        609,083          390,284
      Deferred revenues & gain on
       sale-leaseback transactions            314,090          423,349
      Accrued interest payable                 30,513           37,838
        Total current liabilities           2,645,603        2,200,022
    Long-term debt, less current
     maturities                            12,381,598        6,694,102
    Redeemable convertible Series C
     preferred stock, 5,000,000 shares
     designated at $0.01 par value;
     1,000,000 issued and outstanding      11,882,545       10,696,697
    Commitments and contingency
    Stockholders' (Deficit)
      Common stock, 75,000,000 shares
       authorized at $0.001 par value;
       10,779,680 issued and outstanding
       in 2007; 10,773,454 issued and
       outstanding in 2006                     10,779           10,773
      Additional paid-in capital           55,109,333       54,950,315
      Accumulated deficit                 (70,089,430)     (61,898,373)
        Total stockholders' (deficit)     (14,969,318)      (6,937,285)
        Total liabilities and
         stockholders' (deficit)          $11,940,428      $12,653,536



               CONDENSED CONSOLIDATED FINANCIAL HIGHLIGHTS
                  Years Ended December 31, 2007 and 2006

                                          2007         2006         Change
      Total revenues                   $8,785,712   $8,063,843     $721,869
      Cost of revenues                  3,640,219    3,574,126       66,093
          Gross profit                  5,145,493    4,489,717      655,776
      Research and development
       expenses                         1,891,820    1,325,076      566,744
      Sales, general and
       administrative expenses:
          Litigation and settlement
           expenses                     1,117,966          -      1,117,966
          Management restructuring
           expenses                       206,726      149,399       57,327
          Consulting expenses -
           Sarbanes-Oxley                  70,059          -         70,059
          Other sales, general and
           administrative expenses      8,530,691    8,308,484      222,207
                Total sales, general
                 and administrative
                 expenses               9,925,442    8,457,883    1,467,559
          Total R&D and sales,
           general and administrative
           expenses                    11,817,262    9,782,959    2,034,303
          Operating loss               (6,671,769)  (5,293,242)  (1,378,527)
          Interest expense, net          (529,958)    (158,394)    (371,564)
      Net loss                        $(7,201,727) $(5,451,636) $(1,750,091)
      Preferred stock dividends and
       accretion                       (1,185,848)  (1,112,299)     (73,549)
      Net loss available to common
       stockholders                   $(8,387,575) $(6,563,935) $(1,823,640)


DATASOURCE: iSECUREtrac Corp.



CONTACT:  Jeff Durski of iSECUREtrac Corp., [phone],





Web site:  http://www.isecuretrac.com/ 

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