Color Kinetics reports financial results for fourth quarter and full year 2006

Revenues were $18.2 million, an increase of 25% from the $14.5 million reported in the fourth quarter of 2005. GAAP net income was $1.6 million or $0.07 per fully diluted share. Non-GAAP net income was $2.2 million or $0.10 per fully diluted share prior to non-cash charges of $639,000 associated with the FAS 123R accounting standard.

Revenues for the full year ended December 31, 2006 were $65.4 million, an increase of 24% from the $52.9 million reported in 2005. GAAP net income was $3.2 million or $0.16 per fully diluted share. Non-GAAP net income prior to the stock-based compensation charges was $5.6 million or $0.28 per fully diluted share.

"We believe there's little doubt among industry leaders that LEDs will play an integral role in the future of lighting," said Bill Sims, President and CEO, Color Kinetics. "Our strong financial results reflect the exciting growth and adoption we're witnessing across multiple sectors - including newly expanded markets for our lighting systems, and the accelerating traction of our licensing program. We have held firm to an investment strategy that continues to deliver returns, whether through product line expansion, new engineering resources or on-going patent prosecution - all intended to help drive continued top- and bottom-line success in the longer term."

"Today there is heightened awareness of the potential for energy-efficient lighting to help conserve resources and spare the environment. We believe such increased attention to the matter, along with continued research, development and government funding, will help set the stage for an eventual transition to LED technology as the right long-term solution," said Sims. "As the market opportunities for LED lighting continue to grow, Color Kinetics is preparing in parallel to lead the transformation forward through important new technologies, systems and strategic partnerships."

Additional 2006 achievements included:

• The completion of a successful follow-on public stock offering
• The unveiling of new landmark installations such as LAX Gateway at Los Angeles International Airport, the London Eye, and feature film Deck the Halls
• Product line expansions in both color and white light
• Accelerating strength in licensing, including agreements with Osram Sylvania for Gotham Architectural Downlighting, Neo-Neon, Martin Professional, Robe Show Lighting and Dialight
• The issuance of 14 new patents
• A court victory and conclusion of all litigation with Super Vision
• The award of a $1.7 million grant by the Department of Energy
• Inclusion among Forbes' top 25 technology growth companies

For the first quarter of 2007, the company currently targets revenues within the range of $18.4 million to $19.4 million, with non-GAAP net income of $0.09 to $0.11 per fully diluted share prior to stock-based compensation expense. Net income on a GAAP basis, reflecting FAS 123R stock compensation, is expected to be between $0.06 and $0.08 per fully diluted share.

Color Kinetics will host a conference call to review its fourth quarter and full-year results after the close of market today. The conference call may be accessed by dial-in number or via the Internet as follows:

Time: 4:30 pm ET
Domestic dial-in number: 866-700-5192
International dial-in number: 617-213-8833
Passcode: 70499419
Webcast: http://phx.corporate-ir.net/phoenix.zhtml?c=178448&p=irol-irhome

A dial-in replay of the conference call will be available from 6:30 pm ET on February 8 through February 15 at 888-286-8010 (domestic), 617-801-6888 (international), passcode: 15264449. The webcast will be archived and available for one year via the Investor Relations section of Color Kinetics' website.

Click here to view the fourth quarter 2006 balance sheet, statement of operations, and cash flow financial statements.

About Color Kinetics
Color Kinetics Incorporated (NASDAQ: CLRK) transforms environments through new, dynamic uses of light. Its award-winning lighting systems and technologies apply the benefits of LEDs as a highly efficient, long lasting, environmentally friendly, and inherently digital source of illumination - reinventing light itself as a highly controllable medium. Color Kinetics also enables widespread adoption of LED lighting through OEM and licensing partnerships in diverse markets. The company is headquartered in Boston, MA with offices in the UK and China. More information is available at http://www.colorkinetics.com.