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China Information Security Technology, Inc. Announces $5.0 Million Stock Repurchase Program

PRNewswire
Oct 13, 2008

SHENZHEN CITY, China, Oct. 13 /Xinhua-PRNewswire-FirstCall/ -- China Information Security Technology, Inc., (NASDAQ: CPBY) ("China Information Security," "CIST" or the "Company"), a leading application software developer, systems integrator and full-service Geographic Information Systems ("GIS") solutions provider to the public security and civil-use markets in China, today announced that its Board of Directors has approved a $5.0 million stock repurchase program.

The amount, timing and extent of any repurchases will depend on market conditions, the trading price of its common shares and other factors and will be subject to restrictions relating to volume, price and timing under applicable law, including Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. CIST expects to implement this share repurchase program over the next 12 months, in a manner consistent with market conditions and the interest of shareholders. Repurchases may be in open-market transactions or through privately negotiated transactions, and the repurchase program may be expanded by the Board of Directors in the future. The repurchases will be funded with available cash on hand. Any shares of common stock repurchased under the program will be returned to treasury.

The Company expects to meet or exceed its previous guidance for 2008 with pro forma revenues of $85 million, and pro forma net income of $27 million. The estimated pro forma net income for 2008 excludes any non-cash expenses as a result of employee stock awards in 2007 and 2008 and amortization of intangible assets associated with the recent acquisitions of ISS, Bocom Technology and GEO.

"We believe that our stock is significantly undervalued in the marketplace and represents an attractive investment for our shareholders," said Mr. Jiang Huai Lin, CEO of China Information Security. "Our business and end markets remain strong and we maintain a solid balance sheet with approximately $20 million in cash and cash equivalents and no long-term debt as of June 30, 2008. Additionally, we continue to generate cash flow from operations. We believe that this buyback program is a prudent use of our cash and represents our commitment to shareholders."

About China Information Security Technology, Inc.

Through its wholly-owned Chinese subsidiary, China Information Security Technology, Inc. ("CIST" or the "Company") headquartered in Shenzhen, China ("PRC"), is a leading application software developer, systems integrator and full-service Geographic Information Systems ("GIS") solutions provider to the public security and civil-use markets in China, aiming to use information technology to improve public safety and information management. Its main business lines range from digital public security, to intelligent border control, and residence card information management systems. Its commitment to leading-edge technology and quality assurance has won the Company numerous government and enterprise contracts throughout China. To learn more about the Company, please visit the corporate website at http://www.chinacpby.com/ .

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of China Information Security Technology, Inc., and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements" including statements regarding the significance of the share repurchase program; the general ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( http://www.sec.gov/ ). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

  For more information, please contact:

  Company Contact:
   Mr. Michael Lin
   Vice President, Investor Relations
   China Information Security Technology, Inc.
   Tel:   +1-949-743-0868
   Email: mlin@chinacpby.com
   Web:   http://www.chinacpby.com/

  Investor Relations Contact:
   Mr. Crocker Coulson
   President
   CCG Investor Relations
   Tel:   +1-646-213-1915 (NY office)
   Email: crocker.coulson@ccgir.com
   Web:   http://www.ccgir.com/

SOURCE: China Information Security Technology, Inc.

CONTACT: Company Contact: Mr. Michael Lin, Vice President, Investor
Relations of China Information Security Technology, Inc., +1-949-743-0868, or
mlin@chinacpby.com; Or Investor Relations Contact: Mr. Crocker Coulson,
President of CCG Investor Relations, +1-646-213-1915 (NY office), or
crocker.coulson@ccgir.com

Web site: http://www.chinacpby.com/
http://www.ccgir.com/
http://www.sec.gov/


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