Sirit Delivers Seventh Consecutive Quarter of Year-over-Year Growth



    Operational strength reflected in double digit growth, improved margins
    and realized acquisition synergies

    TORONTO, Nov. 13 /CNW/ - Sirit Inc. ("Sirit") (TSX: SI), a leading
provider of radio frequency identification ("RFID") technology, today reported
its financial results for the third quarter ended September 30, 2007. All
amounts are stated in Canadian Dollars, unless otherwise noted.

    
    Financial Achievements
    ---------------------
    -   The third quarter of 2007 represents the seventh consecutive quarter
        of revenue growth compared to the same quarter in the prior year.

    -   Sirit achieved a revenue growth rate of 11% (19% in US Dollars
        excluding foreign exchange impact) compared to the third quarter of
        2006. Total year-to-date revenue reached $19.1 million, a
        $3.1 million or 19% growth rate over the first nine months of 2006
        (22% in US Dollars excluding foreign exchange impact).

    -   Development expenses of $0.7 million reflect ongoing operating
        requirements when compared to the $1.6 million in the prior year
        required to complete development activities assumed in the 2006
        acquisitions.

    -   Total operating expenses remained consistent with the first two
        quarters of 2007. Excluding foreign exchange losses, for the three
        months ended September 30, 2007, operating expenses were
        $3.3 million, a $1.1 million decrease over the same period in 2006.

    -   Excluding the impact of foreign exchange, the Company utilized
        $0.3 million of cash in the third quarter of 2007, a significant
        improvement over the $2.7 million of cash utilized in the third
        quarter of 2006.
    

    "This quarter extends our year-over-year revenue growth trend achieving
another solid quarter for the Company. The reported 11% increase in third
quarter revenue compared to the prior year represents the seventh consecutive
quarter of double digit growth for Sirit," commented Anastasia Chodarcewicz,
Chief Financial Officer, Sirit Inc. "In line with our expectations, Sirit
continued to manage its expenses and control cash spending reflecting an
overall solid operation poised to take on future expansion projects as they
arise."
    Revenue of $4.2 million from automatic vehicle identification ("AVI")
applications increased by $0.5 million or 14% versus the $3.7 million in the
third quarter of 2006. This level of revenue is $0.9 million lower than Q2
2007 reflecting the quarterly seasonal slow down experienced now for the past
three years as well as foreign exchange impact. Radio frequency solutions
("RFS") applications revenue remained consistent at $1.4 million for both the
third quarter of 2007 and 2006. The decline from the second quarter of this
year reflects the uneven timing and size of deployments as the industry
continues to slowly ramp up as well as foreign exchange impact.
    Gross profit of 35.9% during the third quarter is consistent with Q2 2007
and higher than the 33.2% reported in Q3 2006. The improvement over the prior
year reflects the specific mix of customers during the quarter.
    The foreign exchange loss of $0.6 million primarily reflects the impact
of converting net assets held primarily in US dollars into Canadian dollars
for financial reporting purposes only. As day-to-day operations are carried
out predominantly in US dollars, the foreign exchange impact is negligible on
the conduct of ongoing business.
    Excluding $0.6 million in foreign exchange, operating loss for the
quarter was $1.2 million compared to a loss of $2.7 million in Q3 2006. The
Company reported a net loss of $1.8 million in Q3 2007 compared to a net loss
of $2.6 million in Q3 2006.

    
    Quarterly Highlights
    --------------------
    Sirit continued to advance its business during Q3 2007:

    -   Sirit's INfinity 510 was ranked first over six other leading
        competitive European RFID readers by ODIN technologies in the first
        European RFID Reader Benchmark(TM).

    -   Sirit announced support for Microsoft's BizTalk Server 2006 R2 and
        IBM's WebSphere RFID Premises Server, version 6.0 with the
        INfinity 510. The device agents facilitate fast and seamless
        integration of Sirit readers into implementation environments using
        either of the two software infrastructures.

    -   The Company continues to support and deliver to its previously
        announced customers in Near Field Communications applications.

    -   Sirit supported its sales and marketing efforts by participating in a
        number of industry conferences and exhibitions including the
        24th International German Logistics Congress where Sirit participated
        with METRO Group highlighting the portal set-up of the Infinity 510
        as used in their REAL hyperstores.
    

    "This year has been filled with many positive achievements that position
Sirit ahead of our competition. We continue to demonstrate that our current
operations, with a minimal cash burn rate, are self-sustaining for the current
and longer term," stated Norbert Dawalibi, President and CEO, Sirit Inc. "With
a strong portfolio of products lead by the INfinity 510 and new AVI IDentity
series solutions as well as solid operations, we are able to focus on
longer-term, high growth opportunities."

    Conference Call and Webcast

    Sirit will host a conference call to discuss the quarterly results on
Tuesday, November 13, 2007 at 10:00 am EST. The call will be Webcast on the
Internet and is accessible by visiting www.sirit.com.

    About Sirit Inc.

    Sirit Inc. (TSX: SI) is a leading provider of Radio Frequency
Identification (RFID) technology worldwide. Harnessing the power of Sirit's
enabling-RFID technology, customers are able to more rapidly bring high
quality RFID solutions to the market with reduced initial engineering costs.
Sirit's products are built on more than 14 years of RF domain expertise
addressing multiple frequencies (LF/HF/UHF), multiple protocols and are
compliant with global standards. Sirit's broad portfolio of products and
capabilities are easily customized to address new and traditional RFID market
applications including Supply Chain & Logistics, Cashless Payment (including
Electronic Tolling), Access Control, Automatic Vehicle Identification,
Inventory Control & Management, Asset Tracking and Product Authentication. For
more information, visit www.sirit.com.

    Cautionary Note Regarding Forward Looking Statements

    Safe Harbor Statement under the United States Private Securities
Litigation Reform Act of 1995: Except for the statements of historical fact
contained herein, the information presented constitutes "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievement of Sirit to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Readers are cautioned not to place undue reliance
on these forward-looking statements. Actual results may differ materially from
those indicated by these forward-looking statements as a result of risks and
uncertainties impacting Sirit's business which are discussed in the section
entitled "Description of the Business - Risks Factors" in Sirit's Annual
Information Form dated March 19, 2007 as filed with the securities regulatory
authorities in Canada via SEDAR. Although Sirit has attempted to identify
important factors that could cause actual results to differ materially, there
may be other factors that cause results not to be as anticipated, estimated or
intended. Sirit does not undertake any obligation to update any
forward-looking statements contained in this document as a result of new
information, further events or otherwise.

    "Sirit", the Sirit Design and "vision beyond sight" are all trademarks of
    Sirit Inc. All other names of actual companies and products mentioned
    herein may be the trademarks of their respective owners.

    
    Sirit Inc.
    Interim Consolidated Balance Sheets
    (expressed in thousands of Canadian dollars)
    Unaudited

                                                        As at        As at
                                                     September 30 December 31
                                                         2007        2006
                                                     ------------ -----------
    Assets
      Current Assets
        Cash and cash equivalents                     $    8,846  $    9,397
        Accounts receivable                                3,359       3,957
        Inventory                                          2,527       2,997
        Prepaids and deposits                                365         348
                                                      ----------- -----------
                                                          15,097      16,699

      Long-term investments                                  110         849
      Property and equipment                               1,100       1,095
      Intangible assets                                    1,311       1,734
      Goodwill                                             3,905       3,905
                                                      ----------- -----------
                                                      $   21,523  $   24,282
                                                      ----------- -----------
                                                      ----------- -----------
    Liabilities
      Current Liabilities
        Accounts payable and accrued liabilities      $    4,305  $    4,954
        Current deferred revenue                             399         293
        Current warranty obligations                         106         136
                                                      ----------- -----------
                                                           4,810       5,383

      Long-term deferred revenue                             562         507
      Long-term warranty obligations                         109         162
                                                      ----------- -----------
                                                           5,481       6,052
                                                      ----------- -----------

    Shareholders' Equity
      Share capital                                       47,852      47,830
      Contributed surplus                                  2,548       2,075
      Deficit                                            (34,358)    (31,675)
                                                      ----------- -----------
                                                          16,042      18,230
                                                      ----------- -----------
                                                      $   21,523  $   24,282
                                                      ----------- -----------
                                                      ----------- -----------



    Sirit Inc.
    Interim Consolidated Statements of Operations, Comprehensive Income and
    Deficit
    (expressed in thousands of Canadian dollars except per share amounts)
    Unaudited

                                    Three Months Ended    Nine Months Ended
                                       September 30          September 30
                                     2007       2006       2007       2006
                                  ---------- ---------- ---------- ----------

    Revenue                       $   5,635  $   5,086  $  19,098  $  16,006
    Cost of sales                     3,610      3,399     12,311     10,480
                                  ---------- ---------- ---------- ----------
    Gross profit                      2,025      1,687      6,787      5,526
                                  ---------- ---------- ---------- ----------

    Expenses
      Selling, general and
       administrative                 2,234      2,387      6,541      7,197
      Stock-based compensation          106        168        473        596
      Development                       698      1,551      1,870      4,044
      Amortization                      234        262        689        621
      Foreign exchange loss             597         14      1,573        119
                                  ---------- ---------- ---------- ----------
                                      3,869      4,382     11,146     12,577
                                  ---------- ---------- ---------- ----------
    Operating loss                   (1,844)    (2,695)    (4,359)    (7,051)

      Gain on sale of long-term
       investment                         -          -      1,401          -
      Interest income, net               90         81        275        166
                                  ---------- ---------- ---------- ----------
    Net loss and comprehensive
     income for the period        $  (1,754) $  (2,614) $  (2,683) $  (6,885)

      Deficit, beginning of period  (32,604)   (26,987)   (31,675)   (22,716)
                                  ---------- ---------- ---------- ----------

    Deficit, end of period        $ (34,358) $ (29,601) $ (34,358) $ (29,601)
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Basic and diluted loss
     per share                    $   (0.01) $   (0.02) $   (0.02) $   (0.06)
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Basic and diluted weighted
     average number of common
     shares ('000s)                 145,703    145,527    145,642    117,893



    Sirit Inc.
    Interim Consolidated Statements of Cash Flows
    (expressed in thousands of Canadian dollars)
    Unaudited

                                    Three Months Ended    Nine Months Ended
                                       September 30          September 30
                                     2007       2006       2007       2006
                                  ---------- ---------- ---------- ----------
    Cash provided by/(used in):
    Operating Activities
      Net loss for the period     $  (1,754) $  (2,614) $  (2,683) $  (6,885)
      Items not involving cash
       and cash equivalents             340        430      1,162      1,217
      Gain on sale of long-term
       investment                         -          -     (1,401)         -
      Foreign exchange loss             597         14      1,573        119
                                  ---------- ---------- ---------- ----------
                                       (817)    (2,170)    (1,349)    (5,549)
      Net change in non-cash
       working capital items            595       (419)       564       (154)
                                  ---------- ---------- ---------- ----------
                                       (222)    (2,589)      (785)    (5,703)
                                  ---------- ---------- ---------- ----------
    Investing Activities
      Additions to property and
       equipment                        (61)      (120)      (271)      (274)
      Acquisitions, net of
       cash acquired                      -          -          -     (2,667)
      Proceeds on sale of long-
       term investment                    -          -      2,010          -
                                  ---------- ---------- ---------- ----------
                                        (61)      (120)     1,739     (2,941)
                                  ---------- ---------- ---------- ----------
    Financing Activities
      Public offering of common
       shares, net of associated
       expenses                           -        (38)         -     11,523
      Issuance of common shares
       upon exercise of stock
       options                            -          1         22        109
                                  ---------- ---------- ---------- ----------
                                          -        (37)        22     11,632
                                  ---------- ---------- ---------- ----------
    Exchange rate impact on cash
     and cash equivalents              (560)       (18)    (1,527)      (106)
                                  ---------- ---------- ---------- ----------
    (Decrease)/increase in cash
     and cash equivalents              (843)    (2,764)      (551)     2,882
      Cash and cash equivalents,
       beginning of period            9,689     11,725      9,397      6,079
                                  ---------- ---------- ---------- ----------

    Cash and cash equivalents,
     end of period                $   8,846  $   8,961  $   8,846  $   8,961
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------

    Cash and cash equivalents
     consist of:
      Cash                        $   1,960  $   1,392  $   1,960  $   1,392
      Short-term commercial paper     6,886      7,569      6,886      7,569
                                  ---------- ---------- ---------- ----------
                                  $   8,846  $   8,961  $   8,846  $   8,961
                                  ---------- ---------- ---------- ----------
                                  ---------- ---------- ---------- ----------
    





For further information:

For further information: Anastasia Chodarcewicz, Sirit Inc., (416)
367-1897 x227, achodarcewicz@sirit.com

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SIRIT INC.

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