SOURCE: SYSTRAN

July 31, 2008 12:41 ET

SYSTRAN : First Semester 2008 Interim Report

PARIS--(Marketwire - July 31, 2008) - www.systransoft.com

Leading Provider of Language Translation Technologies

First Semester 2008 Interim Report

- Sales of 3,637 KEUR

- Operating Income of 39 KEUR

August 1st 2008 - SYSTRAN, the leading provider of language translation technologies today announced its consolidated financial results for the first semester ended June 30th, 2008.

+-------------------------+---------------+---------------+---------------+
|Consolidated and Audited |  1st semester |  1st semester |  Annual change|
|Accounts (in K€)         |               |               |               |
+-------------------------+---------------+---------------+---------------+
|                         |           2008|           2007|    2008 / 2007|
+-------------------------+---------------+---------------+---------------+
|Sales                    |          3,637|          5,099|       - 28.7 %|
+-------------------------+---------------+---------------+---------------+
|Operating Income         |             39|            785|       - 95.0 %|
+-------------------------+---------------+---------------+---------------+
|%                        |        + 1.1 %|       + 15.4 %|               |
+-------------------------+---------------+---------------+---------------+
|Net Income - Group’s     |           -322|            525|             na|
|share                    |               |               |               |
+-------------------------+---------------+---------------+---------------+
|%                        |             na|       + 10.3 %|               |
+-------------------------+---------------+---------------+---------------+
Consolidated sales for the first half of the year amounted to 3,637 KEUR , a decrease of 28.7 % as compared with the first semester 2007. The US Dollar decline continued to have a strong negative impact. At a constant exchange rate the consolidated sales amounted to 3,932 KEUR .

Operating income amounted to 39 KEUR as compared with 785 KEUR in 2007.

Net loss amounted to 322 KEUR as compared with a net profit of 525 KEUR for the six first months of 2007.

The Company's cash position was 9,344 KEUR on June 30th, 2008, as compared with 10,742 KEUR on December 31st, 2007.

Activities - First Semester 2008

+-----------------------+--------------+----------+--------------+----------+
|                       |  1st semester|     In   |  1st semester|     In   |
+-----------------------+--------------+----------+--------------+----------+
|                       |          2008|         %|          2007|         %|
+-----------------------+--------------+----------+--------------+----------+
|                       |              |  of total|              |  of total|
+-----------------------+--------------+----------+--------------+----------+
|  In K€                |              |          |              |          |
+-----------------------+--------------+----------+--------------+----------+
|  Software Publishing  |         2,927|    80.5 %|         4,017|    78.8 %|
+-----------------------+--------------+----------+--------------+----------+
|  Professional Services|           710|    19.5 %|         1,082|    21.2 %|
+-----------------------+--------------+----------+--------------+----------+
|  Consolidated Sales   |         3,637|   100.0 %|         5,099|   100.0 %|
+-----------------------+--------------+----------+--------------+----------+
+-----------------------+--------------+----------+--------------+----------+

+-----------------------+---------------+
|                       |  Annual change|
+-----------------------+---------------+
|                       |    2008 / 2007|
+-----------------------+---------------+
|                       |               |
+-----------------------+---------------+
|  In K€                |               |
+-----------------------+---------------+
|  Software Publishing  |       - 27.1 %|
+-----------------------+---------------+
|  Professional Services|       - 34.4 %|
+-----------------------+---------------+
|  Consolidated Sales   |       - 28.7 %|
+-----------------------+---------------+
+-----------------------+---------------+
Sales generated from software licenses totaled 2,927 KEUR , a decrease of 27.1 % as compared with the first semester of 2007. This decrease is the result of a decline in sales of Desktop Products. For the first semester 2007, Desktop Products benefited from a successful new version release.

Professional Services sales amounted to 710 KEUR as compared with 1,082 KEUR for the same period last year, a decrease of 34.4 %. These results reflect fewer orders received from the US Federal Government during the past quarters. SYSTRAN Software, Inc. recently renewed its contract with US Federal Government and total work orders amounted to 1,596 KUSD as compared with 721 KUSD at June 30, 2007.

During the first quarter of 2008 SYSTRAN launched the new version 6 of its Server Products. This launch occurred at the end of the first quarter and had little impact on second quarter revenues.

Outlook

SYSTRAN's efforts are now focused on the commercial release of the version 6 Server Products expected to drive revenue growth from Corporate customers.

Development of SYSTRAN's version 7 has commenced. The primary goal of this version is to improve translation quality with new translation engines.

Sales for the second quarter of 2008 are lower than those in the second quarter of 2007. Growth between the second and first quarters of 2008 is lower than the same period of 2007. SYSTRAN continues to face a depressed economic environment and has no visibility on the Euro / US Dollar exchange rate. Because of the combination of these factors, SYSTRAN currently expects that sales and operating income for the second half of 2008 will be similar or higher than the first semester of 2008.

About SYSTRAN

SYSTRAN is the market leading provider of language translation software products and solutions for the desktop, enterprise and Internet that facilitate communication in 52 language combinations and in 20 vertical domains. With over three decades of expertise and research and development, SYSTRAN's software is the choice of leading global corporations, portals including AltaVista™, Yahoo!®, and Microsoft®, and public agencies like the US Intelligence Community and the European Commission.

Use of SYSTRAN products and solutions enhance multilingual communication and increase user productivity and time-savings for B2E, B2B and B2C market segments as they deliver real-time language solutions for search, content management, online customer support, intra or inter company collaboration, and eCommerce.

SYSTRAN is headquartered in Paris, France with a North American office located in San Diego, California, USA.

SYSTRAN (Code ISIN FR0004109197, Bloomberg: SYST NM, Reuters: SYTN.LN) is listed on EuroNext Paris, Compartiment C. For more information, visit www.systransoft.com

Contact

Dimitris SABATAKAKIS, Chairman & CEO

Telephone: +33 (0)1 47 96 86 86 Fax: +33 (0)1 46 98 00 59

Email: sabatakakis@systran.fr

Revenue for the third quarter of 2008 will be announced on November 7th, 2008.

This Press Release is available for download at: http://www.systran.co.uk/translation/systran/investors/press-releases

Half-Year financial report is available for download at:

http://www.systran.co.uk/translation/systran/investors/financial-report/half-year

+-------------------------+--------------+--------------+-------------+
|                         |  1stsemester |  1st semester|     Year    |
+-------------------------+--------------+--------------+-------------+
|                         |          2008|          2007|         2007|
+-------------------------+--------------+--------------+-------------+
|(In K€)                  |              |              |             |
+-------------------------+--------------+--------------+-------------+
|                         |    (6 months)|    (6 months)|  (12 months)|
+-------------------------+--------------+--------------+-------------+
|Net sales                |         3,637|         5,099|        8,848|
+-------------------------+--------------+--------------+-------------+
|Other operating revenue  |             0|              |            0|
+-------------------------+--------------+--------------+-------------+
|Total revenue from       |         3,637|         5,099|        8,848|
|operations               |              |              |             |
+-------------------------+--------------+--------------+-------------+
|Cost of sales and other  |        -1,304|         -1,71|        -2,99|
|external expenses        |              |              |             |
+-------------------------+--------------+--------------+-------------+
|Taxes and duties         |           -94|           -77|         -189|
+-------------------------+--------------+--------------+-------------+
|Wages and salaries       |        -2,029|        -2,355|       -4,419|
+-------------------------+--------------+--------------+-------------+
|Amortization (net)       |          -162|          -164|         -303|
+-------------------------+--------------+--------------+-------------+
|Other income / (expenses)|            -4|            25|            7|
+-------------------------+--------------+--------------+-------------+
|Current operating income |            44|           819|          954|
+-------------------------+--------------+--------------+-------------+
|Other operating income / |            -5|           -34|          -37|
|(expenses)               |              |              |             |
+-------------------------+--------------+--------------+-------------+
|Operating income         |            39|           785|          917|
+-------------------------+--------------+--------------+-------------+
|Financial income from    |          -273|           107|         -116|
|cash activities          |              |              |             |
+-------------------------+--------------+--------------+-------------+
|Financing expenses       |            -6|            -7|          -14|
+-------------------------+--------------+--------------+-------------+
|Net financing cost       |          -279|           100|         -130|
+-------------------------+--------------+--------------+-------------+
|Other financing income / |           -98|           -33|          -27|
|expenses                 |              |              |             |
+-------------------------+--------------+--------------+-------------+
|Profit before tax        |          -338|           852|          760|
+-------------------------+--------------+--------------+-------------+
|Income tax expenses      |            16|          -327|           58|
+-------------------------+--------------+--------------+-------------+
|Profit from operations   |          -322|           525|          818|
+-------------------------+--------------+--------------+-------------+
|Minority interest        |             0|             0|            0|
+-------------------------+--------------+--------------+-------------+
|Net income / (loss) –    |          -322|           525|          818|
|Group’s share            |              |              |             |
+-------------------------+--------------+--------------+-------------+
|                         |  1st semester|  1st semester|         Year|
+-------------------------+--------------+--------------+-------------+
|Earning / (loss) per     |          2008|          2007|         2007|
|share                    |              |              |             |
+-------------------------+--------------+--------------+-------------+
|                         |    (6 months)|    (6 months)|  (12 months)|
+-------------------------+--------------+--------------+-------------+
|On the basis of the      |              |              |             |
|average number of        |              |              |             |
+-------------------------+--------------+--------------+-------------+
|shares in circulation:   |              |              |             |
+-------------------------+--------------+--------------+-------------+
|Number of common shares  |     9,541,804|     9,712,541|    9,683,504|
+-------------------------+--------------+--------------+-------------+
|Euros per share          |        (0.03)|          0.05|         0.08|
+-------------------------+--------------+--------------+-------------+
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