COMPANY CONTACTS:


Kenneth Traub
President and CEO
Tel. (914) 593-0809
KTRAUB@ABNH.COM

Alan Goldstein
Vice President and CFO
Tel. (914) 593-0844
AGOLDSTEIN@ABNH.COM

AMERICAN BANK NOTE HOLOGRAPHICS REPORTS FIRST QUARTER FINANCIAL RESULTS

Elmsford, NY - May 16, 2005 – American Bank Note Holographics, Inc. (“ABNH”) (OTC Bulletin Board: ABHH) a world leader in the origination, production and marketing of holograms for security applications, today announced financial results for the first quarter ended March 31, 2005.

Net income for the first quarter of 2005 was $0.6 million, or $0.03 per share, compared with net income of $0.4 million, or $0.02 per share, for the first quarter of 2004. Sales for the first quarter of 2005 were $6.4 million, compared with $5.0 million for the first quarter of 2004.

Kenneth H. Traub, President and CEO of ABNH, commented, “The first quarter of 2005 was another successful quarter for ABNH in which we set new records again for both sales and profits while we continued to move forward on our investment, move and consolidation program. We continued to successfully implement programs in the transaction card, identity document, pharmaceutical and brand protection markets that are supporting our growth. We are also pleased with the progress of the move into our new state-of-the art facility in Robbinsville, New Jersey. We have already started to staff many key positions in the new facility and expect to move our manufacturing operations from Elmsford and Huntingdon Valley in June and July. Our financial position remains strong with approximately $12 million of cash and short-term investments, and no debt.”

More

ABNH REPORTS FIRST QUARTER FINACIAL RESULTS/2

About American Bank Note Holographics, Inc.

American Bank Note Holographics is a world leader in the origination, production, and marketing of holograms. The Company’s products are used primarily for security applications such as counterfeiting protection and authentication of transaction cards, identification cards, documents of value, consumer and industrial products as well as for packaging and design applications. ABNH is headquartered in Elmsford, NY. For more information, visit www.abnh.com

# # #

ABNH Forward-Looking Statement

This news release includes forward-looking statements that involve risks and uncertainties. Although the Company believes such statements are reasonable, it can make no assurance that such statements will prove to be correct. Such statements are subject to certain factors that may cause results to differ materially from the forward-looking statements. Such factors include the risk factors discussed in the Company’s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K, a copy of which may be obtained from the Company without charge. The Company undertakes no obligation to publicly release results of any of these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unexpected results.

This release and prior releases are available on the ABNH Web site at www.abnh.com

-Financial Tables to Follow-

ABNH REPORTS FIRST QUARTER FINANCIAL RESULTS/3

AMERICAN BANK NOTE HOLOGRAPHICS, INC.
CONDENSED BALANCE SHEETS
(In thousands, except share data)

March 31,
2005

December 31,
2004

-------------

-------------

(Unaudited)

ASSETS

Current Assets:

 

 

 

 

 

 Cash and cash equivalents

$ 3,850

$ 11,357

Short-term investments

8,108

1,989

Accounts receivable, net of allowance for

  doubtful accounts of $190 and $180

4,892

3,889

Inventories

4,232

3,394

Deferred income taxes

996

983

Prepaid expenses

242

317

---------

---------

Total current assets

22,320

21,929

Machinery, equipment and leasehold improvements,

net of accumulated depreciation and amortization

of $10,185 and $10,062

3,756

3,172

Other assets

106

110

---------

---------

Total Assets

$ 26,182

$ 25,211

=========

=========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$ 1,907

$ 1,519

Accrued expenses

2,217

2,065

Deferred revenue

342

-

Customer advances

115

69

Income taxes payable

499

1,058

---------

---------

Total current liabilities

5,080

4,711

Deferred income taxes

1,174

1,186

---------

---------

Total liabilities

6,254

5,897

---------

---------

Commitments and contingencies

Stockholders' Equity:

Preferred stock, authorized 5,000,000 shares;

no shares issued or outstanding

-

-

Common stock, par value $.01 per share, authorized

40,000,000 shares; issued and outstanding

18,517,907 shares and 18,515,907 shares

185

185

Additional paid-in capital

24,062

24,058

Accumulated deficit

(4,319)

(4,929)

---------

---------

Total Stockholders' Equity

19,928

19,314

---------

---------

Total Liabilities and Stockholders' Equity

$ 26,182

$ 25,211

=========

=========

 

ABNH REPORTS FIRST QUARTER FINANCIAL RESULTS/4

AMERICAN BANK NOTE HOLOGRAPHICS, INC.
CONDENSED STATEMENTS OF OPERATIONS - UNAUDITED
(In thousands, except per share data)

Three Months Ended
March 31,

----------------------

2005

2004

-------

-------

Revenue:

Sales

$ 6,400

$ 5,034

Royalty income

10

10

-------

-------

6,410

5,044

Costs and expenses:

Cost of goods sold

2,799

2,270

Selling and administrative

1,918

1,683

Research and development

273

283

Depreciation and amortization

351

160

Facility consolidation

107

­

-------

-------

5,448

4,396

-------

-------

Operating income

962

648

Other income:

Interest income

54

23

-------

-------

54

23

-------

-------

Income before provision for income taxes

1,016

671

Provision for income taxes

406

269

-------

-------

Net income

$ 610

$ 402

=======

=======

Net income per share:

Basic and diluted

$ 0.03

$ 0.02

=======

=======