Nstein announces its results for the first quarter of 2004

2004-05-04

· Q1 2004 revenues up 148% over Q1 2003
· Agreements signed with a major American systems integrator and Health Canada
· Acquisition of KMtechnologies Inc.

Montreal, Quebec, May 4, 2004 - Nstein Technologies Inc. (TSX-V: EIN), an emerging leader in new Business Intelligence (BI) solutions, released its results today for the first quarter ended March 31, 2004.

The Company is reporting first quarter revenues of $761,977, up 148% from $307,106 for the same period last year. The increase is primarily attributable to revenues generated by agreements signed with a major American systems integrator and Health Canada. The net loss for the quarter declined to $620,994 or $0.005 per share from $858,195 or $0.008 per share last year.

"Our diversification strategy based on developing innovative solutions for large corporations and organizations is paying off, with our new Global Intelligent Information Management (GIIM) platform meeting all their expectations," stated Mario Girard, President and Chief Executive Officer of Nstein Technologies. "E-publishing remains a very important market for Nstein, as demonstrated by the recent sale of our solutions to a major American systems integrator. In addition, the recent acquisition of KMtechnologies opens the door to a network of potential customers in Canada, the United States and Europe and provides an important complement to our technology."

Operating, selling and administrative expenses for the first quarter amounted to $924,777 compared to $762,250 last year. The increase was primarily attributable to one-time charges for the management team transition as well as direct costs related to the growth in sales. Net research and development expenses amounted to $375,775 in the first quarter compared to $341,746 last year.

At March 31, 2004, current assets were $4.2 million compared to $4.8 million at December 31, 2003. Current liabilities remained substantially unchanged at $1.9 million. The Company had cash and cash equivalents of $2.5 million at March 31, 2004 compared to $3.1 million at December 31, 2003. Long-term debt totalled $699,169 at March 31, 2004 compared to $749,883 at December 31, 2003.

First Quarter Highlights

On January 6, Nstein announced the signing of a major collaborative agreement with Health Canada to revolutionize the Global Public Health Intelligence Network. The automated portion of GPHIN is a public health application of GIIM. The Nstein Technologies platform powers GPHIN which provides early warning of potential public health threats on a 24/7 basis. This is done by monitoring and disseminating the analysis in six languages. This new GPHIN facilitates improved and more timely decision making by international public health authorities.

Subsequent to the end of the first quarter, Nstein announced the signature of a contract with a major systems integrator for a U.S. government project. This contract has the extra appeal of enabling the Company to pursue its penetration of the U.S. market. The identity of the customer and terms of the contract will be revealed in the coming weeks.


Acquisition of KMtechnologies

On April 22, Nstein announced that it had acquired KMtechnologies, a Canadian developer of web-based collaboration solutions and document, knowledge and customer-relations management solutions. This acquisition provides the Company with an important complement to its existing Global Intelligent Information Management (GIIM) platform catering to large corporations and organizations. It also provides the Company with access to an established customer base and a substantial network of potential customers in Canada, the United States and Europe.

Outlook

"This quarter was very important for Nstein, showing us just how in demand our products are. In recent months, we have pulled together all the elements required to attain our two primary objectives, sales growth and profitability, in the coming quarters. The KMtechnologies acquisition should have an immediate favourable impact on our financial results and growth," Mr. Girard concluded.

About Nstein Technologies 

Nstein Technologies (TSX-V: EIN), an innovative software development company, provides a Global Intelligent Information Management (GIIM) platform for large corporations and organizations. This flexible platform assimilates, organizes, analyses (text mining), shares and disseminates all information arising from structured and unstructured multilingual data sources and essential to operational and decision-making processes. Nstein solutions based on its GIIM platform provide decision-makers with highly pertinent information and transform reactive decision-making into a proactive and even predictive process. Nstein offers new Business Intelligence (BI) solutions that create a new level of global knowledge, accessible at any time, particularly suited to e-publishing, finance, legal, government and homeland security markets. Nstein is based in Montreal, Canada with customer-facing presence in Boston, San Francisco, Washington D.C. and New York, USA. For more information, please visit our website at www.nstein.com

• The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
• Any statement that appears prospective shall not be interpreted as such.

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