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Advanced Process Control for the Refining and Petrochemical Industry
Matrikon announces second quarter results



· Revenue of $10.15 million; $24.45 year-to-date

· Net loss of $0.23 million;
net income of $0.77 million year-to-date

· Software and support revenue of $2.94 million; $6.85 year-to-date

· EPS ($0.01)



Edmonton, AB -April 21, 2004- Matrikon Inc. (TSX: MTK), a leading industrial IT solutions provider, today reported consolidated financial results for the second quarter of fiscal year 2004, which ended February 29, 2004.

Second quarter revenue was $10.15 million compared to $12.45 million in the second quarter of 2003. Year-to-date revenue was $24.45 million compared to $24.28 million in the comparable period of 2003. Net loss for the second quarter was $0.23 million (or a loss of $0.01 per share) compared to net income of $0.77 million (or $0.03 per share) in the comparable period of 2003. Year-to-date net income was $0.77 million compared to $1.40 million in the first six months last year.

"We are disappointed with our results this quarter," said Nizar J. Somji, Matrikon's president and chief executive officer. "Traditionally, the second quarter is our weakest, however this year it was weaker than we anticipated and affected more areas of the business than expected.

"Our below-expectation performance is the result of several factors:

  • Sales were soft for both products and services. We have found that the larger contracts that we have been working to close have a lengthened sales cycle.
  • Utilization, which is typically weak in the second quarter due to a week long holiday shutdown at the end of December and the Australian summer period, was even lower than projected, particularly in Western Canada and Australia. In Australia, several delayed projects resulted in excess capacity.
  • Three projects incurred unanticipated cost overruns, which impacted both revenue and earnings.

"The quarter also had some very positive events, including three new contracts for MxSuite, indicating solid momentum within the manufacturing space." These MxSuite contracts did not meet the requirements for revenue recognition in the second quarter.

"We are confident in our market opportunities and continue to work towards closing several large projects.

"Prior to becoming a public company, we had gone through periods of rationalization and were able to recover quickly, and as a much stronger company. We are confident in our ability to achieve similar results. However, due to the setback of this quarter, we have revised our guidance downwards for the balance of the year."

"We appreciate the ongoing support of our shareholders as we build a stronger and more profitable company."


Based on second quarter results and the unforeseen extended sales cycle for closing larger contracts, management estimates revenue and earnings growth for the year will be in the range of 0% to 10%, excluding acquisitions.


  • Matrikon is in the final stages of negotiating an acquisition of a company that supplies web-based plant performance solutions. The acquisition is subject to Board approval by both companies. Further information on the acquisition will be available once the acquisition is approved.
  • MxSuite was selected by three customers in the second quarter, including a leading designer and manufacturer of non-electronic consumer housewares products, a top tier American machine tool manufacturer and a major Asian automotive manufacturer. These contracts did not meet the requirements for recognition into revenue in the quarter. The prospects for MxSuite continue to improve with the general recovery of manufacturing industries. To further extend momentum, a distributor has been added to supplement Matrikon's internal Mx sales team.
  • An agreement in principle has been reached with respect to settling the lawsuit filed by OSIsoft, Inc. and the lawsuit commenced by Matrikon against OSIsoft. The parties are working towards formalizing the settlement.
  • Matrikon is pleased to be hosting its first annual Users Group event, MVP 2004, in early May. MVP will bring together international clients from the process and manufacturing industries to collaborate and share their experiences on obtaining maximum benefit from Matrikon solutions. Matrikon's industry and product advisory board meetings will be held immediately following MVP.

MD&A and Financial Statements

The complete Management's Discussion and Analysis and Financial Statements can be found on Matrikon's website at www.matrikon.com/investors or by contacting Nicole Sayler at 1-877-628-7456 extension 4010

Conference Call Wednesday, April 21 at 9:00 am Eastern

Matrikon President and CEO Nizar J. Somji and CFO Shafin U. Kanji will hold a conference call to discuss second quarter results on Wednesday, April 21 at 9:00 am Eastern (7:00 am Mountain). To participate live, call 416-640-4127 in the Toronto area and 1-800-814-4857 for all other areas.

A replay will be available until midnight on Wednesday, April 28, 2004. To access the playback service, please dial 416-640-1917 in Toronto or 1-877-289-8525 elsewhere, reservation number 21047112#.

The conference call will also be web cast at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=785180

For more information, contact:

Nicole Sayler
Corporate Communications & Investor Relations

email: nicole.sayler@matrikon.com

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