Nstein Technologies continues its growth in 2nd quarter 2008



    MONTREAL, Aug. 14 /CNW Telbec/ - Nstein Technologies inc. www.nstein.com
(TSX-V: EIN) today announced its 2nd quarter 2008 results.
    Nstein continued its growth in the second quarter of 2008, reporting
revenues of $6 million compared to $4 million for the same period in 2007, for
a 50% increase. Equal credit for this growth can be attributed to the
acquisition of Picdar in February 2008 and the organic increase in the
Company's revenues, due to the 4 new projects it signed during the quarter.
    The Company posted a loss before financial expenses, income taxes,
depreciation and amortization, exchange loss and restructuring costs (EBITDA)
of $1,176,642 compared to a negative EBITDA of $144,315 for the second quarter
of the previous year. This setback is explained by a lower level of licensing
revenues than the Company had anticipated, since some customers delayed their
decision to purchase. The Company closely monitors the economic situation and
the potential impact the slowdown could have on its operations. The net loss
for the three-month period ended June 30, 2008 stood at $1,551,727, or $0.03
per share, compared to $1,010,003, or $0.028 per share, during the same period
in 2007.
    For the six-month period ended June 30, 2008, revenues stood at
$12 million compared to $7.8 million in 2007 and the Company posted a negative
EBITDA of $1.6 million compared to $0.3 million for the same period in 2007.
The net loss for the six-month period stood at $2.4 million, or $0.05 per
share, compared to $1.7 million, or $0.047 per share in 2007. As at June 30,
the Company had cash and cash equivalents of $7.7 million and working capital
of $7.3 million.
    "The Company's outlook remains excellent. Our sales force is working on a
large number of clearly identified projects, which highlights the interest of
potential customers in our solutions. Also, a growing number of customers in
North America and Europe are using our solutions and contributing to promote
our excellent reputation in the industry. Some of our customers are continuing
their collaboration with our professional service teams on new projects. Our
development teams are currently perfecting new versions of our software, which
will be available by the end of the year. These new versions will enable the
Company to increase its technological lead and allow its customers to generate
even more revenues through the use of Nstein's technologies. We intend to be
prudent during these uncertain economic times, but we remain highly motivated
to continue our strong growth and become the world leader in digital
publishing solutions," Mr. Filiatreault concluded.

    About Nstein Technologies Inc.

    Nstein Technologies (TSX-V: EIN) develops and markets multilingual
solutions that power digital publishing for the most prestigious newspapers,
magazines, and content-driven organizations. Nstein's solutions generate new
revenue opportunities and reduce operational costs by enabling the
centralization, management and automated indexing of digital assets. Nstein
partners with clients to design a complete digital strategy for success using
publishing industry best practices for the implementation of its Web Content
Management, Digital Asset Management, Text Mining Engine and Picture
Management Desk products. 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.

    NSTEIN TECHNOLOGIES INC.

    -------------------------------------------------------------------------
    Consolidated Balance Sheets                          As at         As at
                                                       June 30   December 31
                                                          2008          2007
                                                             $             $
                                                    (unaudited)
    -------------------------------------------------------------------------
    Assets

    Current assets
    Cash and cash equivalents                        7,724,586    11,730,855
    Term deposits                                      164,600       185,386
    Accounts receivable                              6,495,728     7,081,392
    Refundable tax credits                           1,282,062     1,540,023
    Work in progress                                 1,439,128       875,350
    Prepaid expenses                                   531,926       330,150
    -------------------------------------------------------------------------
                                                    17,638,030    21,743,156

    Property, plant and equipment                      748,939       538,336
    Intangible assets                                3,818,499     1,171,188
    Goodwill                                        10,677,609     5,641,574
    -------------------------------------------------------------------------
                                                    32,883,077    29,094,254
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities

    Current liabilities
    Bank loans                                         110,538       563,280
    Accounts payable and accrued liabilities         5,442,155     4,012,304
    Deferred revenues                                3,536,233     1,104,685
    Future income tax liabilities                      150,315             -
    Balance of purchase price of a subsidiary          681,008             -
    Current portion of long-term debt                  396,691       295,997
    -------------------------------------------------------------------------
                                                    10,316,940     5,976,266

    Long-term debt                                     615,606       759,832
    Future income tax liabilities                      646,226             -
    -------------------------------------------------------------------------
                                                    11,578,772     6,736,098
    -------------------------------------------------------------------------

    Shareholders' Equity

    Share capital                                   53,810,886    52,652,275
    Other equity components                          2,858,390     2,823,558
    Contributed surplus                              1,420,320     1,223,997
    Deficit                                        (36,785,291)  (34,341,674)
    -------------------------------------------------------------------------
                                                    21,304,305    22,358,156
    -------------------------------------------------------------------------
                                                    32,883,077    29,094,254
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NSTEIN TECHNOLOGIES INC.

    -------------------------------------------------------------------------
    Consolidated Statements      Three months ending       Six months ending
    of Earnings and Deficit                  June 30                 June 30
                                    2008        2007        2008        2007
                                       $           $           $           $
                              (unaudited) (unaudited) (unaudited) (unaudited)
    -------------------------------------------------------------------------
    Revenues                   6,008,624   4,007,729  12,037,855   7,811,603
    Cost of sales, net of
     tax credits               2,861,739   1,718,517   5,386,153   3,528,889
    -------------------------------------------------------------------------
                               3,146,885   2,289,212   6,651,702   4,282,714
    -------------------------------------------------------------------------

    Expenses
    Selling and
     administrative            3,357,316   1,789,186   6,384,989   3,575,144
    Research and
     development, net of
     tax credits                 966,211     644,341   1,910,381   1,046,410
    Depreciation of
     property, plant and
     equipment                    69,797      48,876     145,176      92,026
    Amortization of
     intangible assets           248,279     110,276     427,016     220,870
    Exchange loss (gain)          83,826      51,701     (80,294)     44,066
    Financial expenses            10,761     166,594     (54,738)    464,556
    Restructuring fees                 -     488,241     419,156     488,241
    -------------------------------------------------------------------------
                               4 736 190   3 299 215   9,151,686   5,931,313
    -------------------------------------------------------------------------
    Loss before income
     tax                       1,589,305   1,010,003   2,499,984   1,648,599

    Recovery of income tax
      Future income tax          (37 578)          -     (56 367)          -
    -------------------------------------------------------------------------
                                 (37 578)          -     (56 367)          -

    -------------------------------------------------------------------------
    Net loss and
     comprehensive loss for
     the period                1 551 727   1 010 003   2 443 617   1 648 599

    Deficit - Beginning
     of year                  35,233,564  33,150,189  34,341,674  32,511,593
    -------------------------------------------------------------------------

    Deficit - End of year     36,785,291  34,160,192  36,785,291  34,160,192
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted net
     loss share                    0.030       0.028       0.050       0.047

    Basic and diluted
     weighted average
     number of shares
     outstanding              51,053,643  35,862,431  48,797,518  34,708,782

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NSTEIN TECHNOLOGIES INC.

    -------------------------------------------------------------------------
    Consolidated Statements of   Three months ending       Six months ending
    Cash Flows                               June 30                 June 30
                                    2008        2007        2008        2007
                                       $           $           $           $
                              (unaudited) (unaudited) (unaudited) (unaudited)
    -------------------------------------------------------------------------
    Cash flows from
     operating activities
    Loss for the year         (1,551,727) (1,010,003) (2,443,617) (1,648,599)
    Items not affecting
     cash and cash
     equivalents
      Interest capitalized
       on long-term debt           6,351      16,192      14,621      29,453
      Unrealized exchange
       loss (gain)                  (396)     (3,942)     69,904      (3,883)
      Depreciation of
       property, plant and
       equipment                  69,797      48,876     145,176      92,026
      Amortization of
       intangible assets         248,279     110,276     427,016     220,870
      Amortization of
       deferred financing
       expenses                        -      22,999           -      61,382
      Stock-based
       compensation costs        119,172     129,395     266,157     167,990
      Compensation costs
       related to the
       deferred share unit
       plan for directors         44,750      26,528      75,500      61,189
      Costs related to the
       employee stock
       purchase plan              17,124       9,302      34,796      19,589
      Recovery of income
       tax                       (37,578)          -     (56,367)          -
    -------------------------------------------------------------------------
                              (1,084,228)   (650,377) (1,466,814)   (999,983)
    -------------------------------------------------------------------------

    Change in non-cash
     operating working
     capital items
      Accounts receivable      2,337,292    (181,041)  1,717,441     (11,837)
      Refundable tax
       credits                  (368,710)    (95,339)    257,961    (151,942)
      Work in progress          (107,378)    129,200    (563,778)   (156,590)
      Prepaid expenses           (91,291)     25,428    (118,091)    (65,659)
      Balance receivable
       on the sale of
       software licenses               -           -           -     176,598
      Accounts payable
       and accrued
       liabilities              (395,151)   (436,295)   (184,070)   (571,425)
      Deferred revenues         (551,714)      6,490     862,747     (61,010)
    -------------------------------------------------------------------------
                                 823,048    (551,557)  1,972,210    (841,865)
    -------------------------------------------------------------------------
                                (261,180) (1,201,934)    505,396  (1,841,848)
    -------------------------------------------------------------------------

    Cash flows from
     financing activities
    Variation in bank
     loans                             -     473,280    (452,742)    473,280
    Payments on long-term
     debt                        (35,371)   (411,171)   (188,966)   (706,945)
    Business acquisitions,
     net of cash and cash
     equivalents              (1,080,591)          -  (1,080,591)          -
    Issuance of common
     shares, net of issue
     expenses                    (20,815)  1,889,955     (38,094)  1,900,243
    -------------------------------------------------------------------------
                              (1,136,777)  1,952,064  (1,760,393)  1,666,578
    -------------------------------------------------------------------------

    Cash flows from
     investing activities
    Variation in term
     deposits                          -      23,495      20,786      17,501
    Variation in
     short-term restricted
     cash                              -     737,234           -   1,457,895
    Business acquisitions,
     net of cash and cash
     equivalents                (287,335)          -  (2,648,694)          -
    Additions to property,
     plant and equipment         (66,728)    (47,692)    (95,138)    (69,006)
    Additions to
     intangible assets           (25,959)    (13,083)    (28,226)    (19,058)
    Proceeds from the
     sale of property,
     plant and equipment               -         878           -         878
    -------------------------------------------------------------------------
                                (380,022)    700,832  (2,751,272)  1,388,210
    -------------------------------------------------------------------------

    Increase in cash
     and cash equivalents     (1,777,979)  1,450,962  (4,006,269)  1,212,940

    Cash and cash
     equivalents -
     Beginning of year         9,502,565   2,129,103  11,730,855   2,367,125
    -------------------------------------------------------------------------

    Cash and cash
     equivalents - End
     of year                   7,724,586   3,580,065   7,724,586   3,580,065
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    
    %SEDAR: 00014563EF




For further information:

For further information: Nstein Technologies inc.: Investor Relations:
Bruno Martel, Chief Financial Officer, (514) 908-5406,
bruno.martel@nstein.com; Media: David Crouy, Marketing Director, (514)
908-5406, david.crouy@nstein.com; Renmark Financial Communications Inc.:
Maurice Dagenais, mdagenais@renmarkfinancial.com; Ryan van de Polder,
rvandepoler@renmarkfinancial.com, (514) 939-3989, Fax: (514) 939-3717;
www.renmarkfinancial.com

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NSTEIN TECHNOLOGIES INC.

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