Nstein Technologies announces its 2009 Q3 results

MONTREAL, Nov. 12 /CNW Telbec/ - Nstein Technologies inc. www.nstein.com (TSX-V: EIN), today announced its results for the third quarter of 2009 ending on September 30, 2009.

Nstein revenues for the third quarter of 2009 were $4.6 million, a 17% decrease from $5.6 million in the previous year. The Company posted a loss before financial charges, income tax, depreciation, amortization, exchange loss and restructuring charges (EBITDA) of $823,915 almost unchanged compared to a negative EBITDA of $818,202 for the third quarter of 2008. The net loss amounted to $1,298,145 or $0.025 per share, compared to a net loss of $1,056,073 or $0.021 per share for the same period the previous year.

"The recession continued to affect sales of new software licenses and related specialized services in the third quarter. Historically, new sales have been lower during the summer, and the current economic situation seems to have amplified this seasonal effect. Potential clients have postponed many projects, but we are confident that these sales will materialize by the end of the fiscal year. Despite the decrease in revenues, we have controlled our losses by applying cost-cutting measures in recent months. At the recession exit, the financial situation of the company remains sound and we will be well positioned when companies in the media sector resume investing in upgrading their digital operations. In addition, we recently announced initiatives intended to expand our offering to clients in the life sciences, government and enterprise sectors. Based on the strength of our experience in management of semantic content within the most demanding industry in this area, we are convinced that our solutions have great value for clients in these target sectors," said Luc Filiatreault, President and CEO of Nstein Technologies.

On September 30, 2009, the Company had cash of $5.7 million, working capital of $6.7 million, long-term debt of $0.3 million. It has access to a $1 million line of credit with a Canadian chartered bank. This line of credit was established during the third quarter and is currently unused.

About Nstein Technologies Inc.

Nstein Technologies (TSX: EIN) provides next generation content management solutions that help information-rich enterprises centralize, understand and manage vast amounts of content. At the heart of Nstein's solutions, semantic analysis allows information to be easily found and packaged together - so it can be connected to the right internal and external audiences. Nstein's Content Management and Web Publishing solutions both rely on Nstein's patented Text Mining Engine for semantic & text analysis. This unlocks content's value and allows clients (from an array of different industries) to leverage existing content to: create and deliver new products; facilitate internal and external research and knowledge sharing; and reduce content-related costs.

    
    - 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
                                                   September 30  December 31
                                                           2009         2008
                                                              $            $
                                                     (unaudited)
    -------------------------------------------------------------------------
    Assets

    Current assets
    Cash and cash equivalents                         5,708,780    7,405,217
    Term deposits                                       164,600      214,600
    Accounts receivable                               4,045,889    6,864,825
    Refundable tax credits                            1,859,236      984,478
    Income taxes receivable                                   -      335,656
    Work in progress                                    765,080      680,639
    Prepaid expenses                                    240,739      207,389
    -------------------------------------------------------------------------
                                                     12,784,324   16,692,804

    Property, plant and equipment                       591,706      736,506
    Intangible assets                                 2,779,632    3,364,257
    Goodwill                                         10,496,905   10,496,905
    -------------------------------------------------------------------------
                                                     26,652,567   31,290,472
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Liabilities

    Current liabilities
    Accounts payable and accrued liabilities          3,173,088    4,442,361
    Deferred revenues                                 2,526,162    3,236,640
    Future income tax liabilities                       150,315      150,315
    Current portion of long-term debt                   257,034      330,503
    -------------------------------------------------------------------------
                                                      6,106,599    8,159,819

    Long-term debt                                      311,090      520,799
    Future income tax liabilities                       463,994      571,071
    -------------------------------------------------------------------------
                                                      6,881,683    9,251,689
    -------------------------------------------------------------------------

    Shareholders' Equity

    Share capital                                    54,216,982   54,028,128
    Other equity components                           2,771,627    2,695,998
    Contributed surplus                               2,066,696    1,805,717
    Deficit                                         (39,284,421) (36,491,060)
    -------------------------------------------------------------------------
                                                     19,770,884   22,038,783
    -------------------------------------------------------------------------
                                                     26,652,567   31,290,472
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NSTEIN TECHNOLOGIES INC.

    -------------------------------------------------------------------------
    Consolidated Statements    Three months ending        Nine months ending
     of Earnings and                  September 30              September 30
     Deficit                     2009         2008         2009         2008
                                    $            $            $            $
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
    -------------------------------------------------------------------------
    Revenues                4,632,715    5,600,516   16,206,078   17,638,371
    Cost of sales, net
     of tax credits         2,221,832    2,663,933    7,704,247    8,050,086
    -------------------------------------------------------------------------
                            2,410,883    2,936,583    8,501,831    9,588,285
    -------------------------------------------------------------------------

    Expenses
    Selling and
     administrative         2,553,672    3,029,453    7,804,763    9,414,442
    Research and
     development, net
     of tax credits           679,921      725,332    1,932,184    2,635,713
    Depreciation of
     property, plant
     and equipment             49,248       81,255      179,659      226,431
    Amortization of
     intangible assets        193,148      246,127      603,912      673,143
    Loss on disposal of
     property, plant and
     equipment                  1,205            -        6,587            -
    Exchange loss (gain)      257,051       (2,729)     346,249      (83,023)
    Financial (revenues)
     expenses                  10,096      (49,204)      50,084     (103,942)
    Restructuring fees              -            -      478,826      419,156
    -------------------------------------------------------------------------
                            3,744,341    4,030,234   11,402,264   13,181,920
    -------------------------------------------------------------------------
    Loss before income tax  1,333,458    1,093,651    2,900,433    3,593,635
    -------------------------------------------------------------------------

    Recovery of income tax

      Future income tax       (35,313)     (37,578)    (107,072)     (93,945)
      -----------------------------------------------------------------------
                              (35,313)     (37,578)    (107,072)     (93,945)

    -------------------------------------------------------------------------
    Net loss and
     comprehensive loss
     for the period         1,298,145    1,056,073    2,793,361    3,499,690
    -------------------------------------------------------------------------
    Deficit - Beginning
     of period             37,986,276   36,785,291   36,491,060   34,341,674
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Deficit - End of
     period                39,284,421   37,841,364   39,284,421   37,841,364
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    Basic and diluted
     net loss share             0.025        0.021        0.054        0,071

    Basic and diluted
     weighted average
     number of shares
     outstanding           52,098,939   51,340,575   51,902,453   49,609,672
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    NSTEIN TECHNOLOGIES INC.

    -------------------------------------------------------------------------
    Consolidated Statements    Three months ending        Nine months ending
     of Cash Flows                    September 30              September 30
                                 2009         2008         2009         2008
                                    $            $            $            $
                           (unaudited)  (unaudited)  (unaudited)  (unaudited)
    -------------------------------------------------------------------------
    Cash flows from
     operating activities
    Loss for the period    (1,298,145)  (1,056,073)  (2,793,361)  (3,499,690)
    Items not affecting
     cash and cash
     equivalents
      Interest capitalized
       on long-term debt        1,473        3,633        8,635       18,254
      Unrealized exchange
       loss (gain)             (2,722)     (28,987)      (1,956)      40,917
      Depreciation of
       property, plant and
       equipment               49,248       81,255      179,659      226,431
      Amortization of
       intangible assets      193,148      246,127      603,912      673,143
      Loss disposal of
       property, plant and
       equipment                1,205            -        6,587            -
      Stock-based
       compensation costs     107,192      116,326      337,358      382,483
      Compensation costs
       related to the
       deferred share unit
       plan for directors       6,765            -      (99,704)      75,500
      Costs related to the
       employee stock
       purchase plan           31,362       22,332       93,468       57,128
      Recovery of income
       tax                    (35,313)     (37,578)    (107,072)     (93,945)
    -------------------------------------------------------------------------
                             (945,787)    (652,965)  (1,772,474)  (2,119,779)
    -------------------------------------------------------------------------

    Change in non-cash
     operating working
     capital items
      Accounts receivable   2,362,305      954,342    2,818,936    2,671,783
      Refundable tax
       credits               (225,759)    (321,144)    (874,758)     (63,183)
      Income tax receivable         -            -      335,656            -
      Work in progress         91,524     (125,281)     (84,441)    (689,059)
      Prepaid expenses        (34,682)      74,721      (33,350)     (43,370)
      Accounts payable
       and accrued
       liabilities           (496,184)     (18,386)    (919,248)    (202,456)
      Deferred revenues      (948,984)    (521,737)    (710,478)     341,010
    -------------------------------------------------------------------------
                              748,220       42,515      532,317    2,014,725
    -------------------------------------------------------------------------
                             (197,567)    (610,450)  (1,240,157)    (105,054)
    -------------------------------------------------------------------------

    Cash flows from
     financing activities
    Variation in bank loans         -            -            -     (452,742)
    Payments on long-term
     debt                     (90,377)     (83,878)    (298,967)    (272,844)
    Payment on Balance of
     purchase price of a
     subsidiary                     -     (533,210)           -   (1,613,801)
    Issuance of common
     shares, net of issue
     expenses                  32,529       17,332       94,635      (20,762)
    -------------------------------------------------------------------------
                              (57,848)    (599,756)    (204,332)  (2,360,149)
    -------------------------------------------------------------------------

    Cash flows from
     investing activities
    Variation in term
     deposits                       -      (50,000)      50,000      (29,214)
    Business acquisitions,
     net of cash and cash
     equivalents              (32,585)     (73,475)    (250,325)  (2,722,169)
    Additions to property,
     plant and equipment      (11,000)     (79,037)     (69,156)    (174,175)
    Additions to intangible
     assets                         -       (6,787)     (20,670)     (35,013)
    Proceeds from the sale
     of property, plant and
     equipment                 14,076            -       38,203            -
    -------------------------------------------------------------------------
                              (29,509)    (209,299)    (251,948)  (2,960,571)
    -------------------------------------------------------------------------

    Decrease in cash and
     cash equivalents        (284,924)  (1,419,505)  (1,696,437)  (5,425,774)

    Cash and cash
     equivalents -
     Beginning of
     period                 5,993,704    7,724,586    7,405,217   11,730,855
    -------------------------------------------------------------------------

    Cash and cash
     equivalents - End
     of period              5,708,780    6,305,081    5,708,780    6,305,081
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

SOURCE NSTEIN TECHNOLOGIES INC.

For further information: For further information: Bruno Martel, Chief Financial Officer, Investor Relations, Nstein Technologies inc., (514) 908-5406, bruno.martel@nstein.com

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NSTEIN TECHNOLOGIES INC.

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