Nstein Reports Second Quarter Results

2003-08-18

Nstein sales increased by 47% compared to the same quarter last year

Montreal, August 18, 2003 " Nstein Technologies Inc., "Nstein" (TSX-V: EIN) reports a second quarter loss of $592,465 or $0.006 per share, as compared with a loss of $1,563,301 or $0.015 per share for the same quarter last year, representing an amelioration of 62%.

The company earned revenues of $407,265 during the three-month period ended June 30, 2003, compared to $277,771 for the same period last year, representing a 47% increase. Income recorded in the second quarter of 2003 is mainly attributable to additional product sales, and maintenance and support services provided to current customers. Revenues were also generated through agreements with partners that use Nstein software's suite to process information to service their clients.

"These increases are a direct response to our continued commitment to the e-publishing market where our technological leadership position assures the retention of our customer base as well as offers interesting growth opportunities," comments Mario Girard, Nstein's Chairman and Chief Executive Officer. "We are encouraged by our accomplishments in growing and retaining a loyal e-publishing customer base, as witnessed by a sale to a new US-based client, Wiley InterScience, who is delivering over 300 renowned publications online. We are also motivated by our value added reseller and OEM network."

In this past second quarter 2003, the company completed sales to new customers via a service agreement with one of Canada's largest consulting firms and via partnerships with US-based companies MEI and Context Media (founded by former Netscape executives). The company solidified its offering with taxonomy management products and related services as well as the Arabic language module. Sales to Internet Securities, Inc. and United Press International were direct results of the extended product offering.

Operating Expenses

Operating, selling and administrative expenses amounted to $672,947 during the second quarter of 2003, a 45% decrease from the second quarter of 2002, when they stood at $1,215,021. Meanwhile, research and development expenses were $421,998, a reduction from last year when they totalled $611,639. These cost reductions result from a program initiated during the fourth quarter in 2002.

Financial Situation and Cash Flow

As at June, 2003, current assets were $2.5 million compared to $4.6 million as at December 31, 2002. Current liabilities reached $1.1 million compared with $1.8 million as at December 31, 2002. Also at the end of the quarter, cash and cash equivalents stood at $1.3 million compared to $3.3 million as at December 31, 2002. Nstein's long-term debt was $94,137 compared to $129,963 as at December 31, 2002.

About Nstein Technologies 

Nstein Technologies Inc. is an industry leader in providing innovative content management software solutions to the e-publishing, enterprise and government sectors. Nstein's products automate complex tasks such as document indexing and summarizing, and enable organizations to maximize the value of their content assets through improved organization, navigation, and faster information retrieval. Nstein's Nserver solution is a core content management component, which has enabled Nstein's customers to significantly increase their ROI through gains in productivity, efficiency and revenue. Nstein's headquarters are in Montreal, Canada, with operations in San Francisco, Washington, D.C., and London, U.K. For further information please visit www.nstein.com.

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• Any statement that appears prospective shall not be interpreted as such.

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