Nstein releases its results for the third quarter of 2004

2004-10-27

Revenues up 271%
- Alis Technologies and Valsar Consulting Group acquisitions
- Financial position enhanced

Montreal, Quebec, October 27, 2004 - Nstein Technologies Inc., "Nstein" (TSX-V: EIN), released its results today for the third quarter ended September 30, 2004.

Revenues for the third quarter were up 271% to $1.1 million compared to $307,155 for the same quarter last year. These revenues are mainly from e-publishing customers and the acquisitions of Alis Technologies Inc. ("Alis") and Valsar Consulting Group Inc. ("Valsar") at the end of the quarter. The net loss totalled $786,233 or $0.005 per share compared to a loss of $445,350 or $0.004 per share a year earlier. For the nine-month period ended September 30, 2004, revenues increased by 154% to $2.6 million compared to $1.0 million for the same period in 2003. The net loss for the period was $2.2 million or $0.015 per share compared to a loss of $1.9 million or $0.018 per share for the same period last year.

"The Alis and Valsar acquisitions have already started contributing to our results, and will be fully included from the fourth quarter on. We are in the process of integrating the activities of the two companies, a process that should be completed in the next few months," stated Mario Girard, Chairman of the Board and Chief Executive Officer for Nstein Technologies. "We expect our improved slate of products and services and the synergy created by the complementarity of our solutions to allow Nstein to become profitable in the coming quarters."

"In the coming quarters, we expect our activities to grow both organically and through acquisitions," Mr. Girard added. "Our efforts are focused on marketing our solutions based on the global management of multilingual, multi-source data, while at the same time continuing to pursue acquisitions when appropriate. We expect to see organic growth from the sale of licences and tailor-made solutions and the development of partnerships that will allow us to integrate Nstein solutions into the software platforms of major international manufacturers. This strategy will enable us to develop our range of Business Intelligence services for large organizations and win a greater market share in this high-growth industry."

Selling and administrative expenses for the third quarter ended September 30, 2004 were $941,624 compared to $568,980 for the third quarter of 2003. The difference was primarily due to an expanded sales force. Net research and development expenses totalled $450,492 for the third quarter compared to $120,496 for the same period last year, with the Company having received a higher-than-expected level of income tax credits in 2003.

For the first nine months of the year, selling and administrative expenses were $2.5 million compared to $2.0 million for the same period in 2003. Net research and development expenses for the period amounted to $1.2 million compared to $748,651 a year earlier.

Current assets were $7.9 million at September 30, 2004 compared to $4.8 million at December 31, 2003, with current liabilities at $4.4 million compared to $1.9 million. Cash and cash equivalents totalled $3.3 million at September 30, 2004 compared to $3.1 million at December 31, 2003. The Company had long-term debt of $2.2 million at September 30, 2004, up from $749,883 at December 31, 2003 due to the inclusion of debt related to the recently-acquired companies.

About Nstein Technologies

Nstein Technologies, (TSX-V: EIN), an innovative software development company, provides large organizations with a Global Intelligent Information Management (GIIM) platform for structured and unstructured multilingual data sources. This flexible platform assimilates, organizes, analyzes (text mining), translates, shares and disseminates information essential to operational and decision-making processes. Nstein's GIIM-based solutions 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 a customer-facing presence in Boston, San Francisco, Washington D.C., New York and Paris. More information is available 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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For more information:

Nstein Technologies Inc.:
Investor Relations

Bruno Martel
Finance Director
Nstein Technologies Inc.
Tel: 514 908-5406
bruno.martel@nstein.com