Nstein reports sustained growth in the second quarter of 2004

2004-08-04

· Revenues up 70% in Q2 2004 and 103% for the year to date
· Contract signed with Time Inc.
· Closing of KMtechnologies Inc. acquisition
· Ongoing discussions with major partners

Montreal, Quebec, August 4, 2004 - Nstein Technologies Inc. (TSX-V: EIN) today released its results for the second quarter ended June 30, 2004. The Company posted second quarter revenues of $690,566 this year, up 70% from $407,265 for the same quarter last year. These revenues are mainly from e-publishing customers. The net loss was $752,011 or $0.006 per share compared to a loss of $592,465 or $0.006 per share a year ago. For the six-month period ended June 30, 2004, revenues increased by 103% to $1.45 million compared to $714,371 for the same period in 2003. The net loss for the period was $1.37 million or $0.010 per share compared to $1.45 million or $0.014 per share for the same period last year.

"Our revenues increased significantly in the second quarter, thanks to the Nstein team's efforts to implement our growth strategy," stated Mario Girard, Chairman of the Board and Chief Executive Officer of Nstein Technologies. "The contract signed recently with Time Inc. is a good example of the success of our strategy, which is primarily aimed at penetrating the large corporation and organization segment. This contract is the outcome of a long and rigorous selection process and is a major opportunity for Nstein to demonstrate the advantages of its solutions to the world's largest magazine publisher."

"Targeted, strategic acquisitions remain part of Nstein's growth strategy. On this front, we completed the KMtechnologies acquisition in the second quarter. This transaction provides us with complementary technology and access to a key sales network," Mr. Girard added.

"Meanwhile, the development of strategic relationships with key IT players remains a priority. As a fact, we are continuing to proceed with the development of joint solutions for large corporations and organizations based on our GIIM platform. This is a long process, but the potential benefits could prove very profitable for the Company. We firmly believe that the initiatives taken since the beginning of the year will continue to have a positive impact on our results in the coming quarters," Mr. Girard concluded.

Operating, selling and administrative expenses amounted to $997,272 in the second quarter, compared to $672,947 in the second quarter of 2003. The increase is primarily due to certain direct costs related to stronger sales, as well as investments for the development of strategic partnerships with key IT players. Net research and development expenses totalled $360,473 in the second quarter, compared to $286,409 for the same period last year. For the first six months of the year, operating, selling and administrative expenses were $1.9 million compared to $1.4 million for the same period in 2003. Net research and development expenses for the period amounted to $736,247 compared to $628,155 for the same period a year ago.

At June 30, 2004, current assets stood at $4.4 million compared to $4.8 million at December 31, 2003. Current liabilities were $2.5 million at June 30, 2004 compared to $1.9 million at December 31, 2003. The Company had cash and cash equivalents of $1.9 million at June 30, 2004 compared to $3.1 million at December 31, 2003. At June 30, 2004, the Company had long-term debt of $1.6 million compared to $749,883 at December 31, 2003.

About Nstein Technologies

Nstein Technologies, (TSX-V: EIN), an innovative software development company, provides large corporations and organizations with a Global Intelligent Information Management (GIIM) platform for structured and unstructured multilingual data sources. This flexible platform assimilates, organizes, analyzes (text mining), 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. and New York. 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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