TROY Group, Inc. Posts First Quarter 2008 Results

COSTA MESA, Calif., April 11  /PRNewswire-FirstCall/ -- TROY Group, Inc. (Pink Sheets: TROY) announced today that financial results for the first quarter of fiscal 2008, which ended February 29, 2008, have been posted on the company's web-site at http://www.troygroup.com/. To access the report, click on About TROY Group then click on Financials. TROY's financial results are also posted at http://www.pinksheets.com/. Enter TROY in the symbol field then click on Financial Report.

Revenue for the three months ended February 29, 2008 decreased to $10.6 million compared to revenue for the three months ended February 28, 2007 of $13.1 million largely due to the one time purchase of printers by one customer included in the first three months of 2007.  Earnings from continuing operations for the three months ended February 29, 2008 decreased to $0.07 per share compared to $0.14 per share for the three months ended February 28, 2007.

As of April 11, 2008 the majority of the Company's current assets consisted of $14.1 million in investments that are auction rate securities. These auction rate securities consist of preferred stock of various closed-end mutual funds which have an AAA credit rating. The auctions for these securities have failed since February 13, 2008 resulting in the investment being illiquid. There has been no default on the underlying securities, and investment income continues to be received in a timely manner while we wait for a return of the market.  It's possible that a market for auction rate securities may not return before the Company has a need to sell its investments, which would result in TROY having to borrow on its $5 million line of credit.  In addition, a prolonged decline in marketability could result in a reduced value of the securities.  There can be no assurance when or if the market for these securities will return.

The consolidated balance sheet and consolidated statement of income are attached to this press release.  Please refer to the quarterly report including financial statements for more detailed information.

                           FINANCIAL STATEMENTS
                             TROY GROUP, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS

                                                February 29,   November 30,
                                                   2008           2007
                       Assets                   (unaudited)
  Current assets:
  Cash and cash equivalents                        $27,000       $782,000
  Investment in available-for-sale securities   14,100,000     11,400,000
  Accounts receivable, net of
   allowances 2008 $343,000; 2007 $293,000       5,406,000      6,302,000
  Inventories                                    3,215,000      3,050,000
  Prepaid expenses and other                       995,000        840,000
  Deferred tax assets                              490,000        734,000
  Current assets of discontinued operations
   held for sale                                         -        311,000
  Total current assets                          24,233,000     23,419,000
  Equipment and leasehold improvements, net      1,708,000      1,725,000
  Goodwill                                         281,000        281,000
  Other assets, including receivables from
   stockholders of $1,903,000                    3,566,000      3,535,000
  Total assets                                 $29,788,000    $28,960,000

            Liabilities and Stockholders' Equity

  Current liabilities:
  Accounts payable                              $3,178,000     $2,645,000
  Accrued expenses                               2,432,000      2,085,000
  Deferred revenue                               1,319,000      1,286,000
  Current liabilities of discontinued
   operations held for sale                              -      1,976,000
  Total current liabilities                      6,929,000      7,992,000
  Non-current liabilities                        1,223,000        881,000
  Total liabilities                              8,152,000      8,873,000

  Commitments and contingencies
  Stockholders' equity:
  Preferred stock, no par value, authorized
   100,000 shares; issued none                           -              -
  Common stock, par value $0.01 per share;
   authorized 13,000,000 shares; issued
   10,563,701 shares; outstanding 9,763,235
   in 2008 and 9,948,235 in 2007                   106,000        106,000
  Additional paid-in capital                    21,812,000     21,587,000
  Retained earnings                              3,681,000      1,441,000
  Less cost of treasury stock - 2008 800,466
   shares, 2007 615,466 shares                  (3,963,000)    (3,047,000)
  Total stockholders' equity                    21,636,000     20,087,000
  Total liabilities and stockholders' equity   $29,788,000    $28,960,000



                             TROY GROUP, INC.
                    CONDENSED CONSOLIDATED STATEMENTS
                                OF INCOME
                               (unaudited)

                                                   Three Months Ended
                                               February 29,    February 28,
                                                   2008           2007

  Net sales                                    $10,553,000    $13,087,000
  Cost of goods sold                             6,343,000      7,658,000
  Gross profit                                   4,210,000      5,429,000

  Operating expenses:
  Selling, general and administrative            2,709,000      2,722,000
  Research and development                         622,000        581,000
  Total operating expenses                       3,331,000      3,303,000
  Operating income                                 879,000      2,126,000
  Interest income                                  178,000        145,000
  Income from continuing operations before
   income taxes                                  1,057,000      2,271,000
  Provision for income taxes                       391,000        818,000
  Income from continuing operations                666,000      1,453,000
  Income (loss) from discontinued operations,
   net of tax                                      (73,000)      (295,000)
  Gain on disposal of discontinued operations,
   net of tax                                    1,647,000              -
  Discontinued operations, net of tax            1,574,000       (295,000)
  Net income                                    $2,240,000     $1,158,000

  Net income per share:
  Basic income from continuing operations            $0.07          $0.14
  Basic income (loss) from discontinued
   operations                                         0.16          (0.03)
  Basic income                                       $0.23          $0.11
  Diluted income from continuing operations          $0.07          $0.14
  Diluted income (loss) from discontinued
   operations                                         0.15          (0.03)
  Diluted income                                     $0.22          $0.11
  Weighted average shares outstanding:
  Basic                                              9,850         10,564
  Diluted                                           10,045         10,564



  About TROY Group


TROY Group, Inc. ("TROY") is a leading provider of on-demand printing solutions. TROY solutions manage, secure and simplify end-to-end enterprise printing environments. TROY offers application software, security printing hardware and specialized consumables for securely printing checks, money orders, transcripts, prescriptions and other important documents. TROY solutions are used by enterprises and governmental organizations to manage fraud, operational risk and comply with government regulations related to protecting information privacy. As a Gold Solutions Partner to Hewlett Packard, TROY is authorized to enhance HP printers and consumables. We sell and service our products to major corporations, banks, key government accounts and distributors worldwide. Visit TROY at http://www.troygroup.com/.

Forward-looking statements of TROY (statements that are not historical fact) in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by terms such as believe, expect, may, will, could and should, and the negative of these terms or other similar expressions. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those discussed in the forward-looking statements. These risks and uncertainties include, but, are not limited to, the ability to sell investments when needed, the ability to develop new products, the ability to hire and retain qualified management, technology and other personnel, the impact of competition from existing and new technologies and companies and the other factors set forth in our periodic reports and other documents that we distribute from time to time which are available in our financial statements under certain important factors on our website TROYgroup.com or pinksheets.com. Statements included in this news release are based upon information known to TROY as of the date of this release, and TROY assumes no obligation to update information contained in this news release.

   TROY Group, Inc.
   940 South Coast Drive, Suite 200
   Costa Mesa, CA 92626
   [phone]
   [phone] Fax
   http://www.troygroup.com/
   Contact: Myra Erickson
   Investor Relations


DATASOURCE: TROY Group, Inc.



CONTACT:  Myra Erickson, Investor Relations of TROY Group, Inc.,

[phone], fax, [phone]



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

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