May 31, 2006 09:01 ET

Syscan Reports Third Quarter Results; Canadian RFID Reader Program Recognition

MONTREAL, QUEBEC--(CCNMatthews - May 31, 2006) - Syscan International Inc. (TSX VENTURE:SYA) today released its third quarter results for the period ending March 31, 2006.

For the three-month period, the Company posted sales of $294,076 down from $789,207 in the previous year, primarily due to a drop in printer product revenues as the company transitions solely to RFID based applications. Concurrently, gross margins rose sharply to 52.5% from 29.1% as new RFID products were introduced. Operating expenses were $422,571 compared to $432,906 in the previous year and the operating loss for the quarter was $268,267 versus $203,329.

As of March 31, 2006, the Company had net working capital of $840,008 and no bank debt. Subsequent to the end of the quarter, on April 28, the company closed a private placement for gross proceeds of $1,423,950.

Mr. Axel Striefler, President and CEO, said, "We are beginning to see positive early sales results for our LiveTrack RFID based animal readers at the farm, transporter, government and slaughterhouse levels, both at home and abroad. In that regard, we are particularly pleased that Agriculture Canada has recently extended and expanded The Canadian RFID Reader Program, for which Syscan's LiveTrack reader is now eligible. We believe that we have the best product on the market bar none, so it is great news for the Company."

Under the Program, participants are reimbursed up to 50 percent of the cost of eligible RFID readers, to a maximum of $1,000 for hand-held readers and $3,000 for panel readers. Eligible costs under the Canadian RFID Reader Program have been expanded to include costs related to reader installation and associated software and hardware. Other modifications to the program include expanding the list of eligible applicants from registered slaughter and processing plants, sales barns, stockyards and/or auction markets, veterinarians and veterinary schools and universities, private pathology labs, mobile butchers and dead stock operators to also include feedlots, truckers and community pastures. In addition, all applicants can purchase more than one RFID reader.

Mr. Striefler continued, "On various other fronts, our NATO application is performing well during an international exercise that is currently underway overseas; we are expanding our temperature monitoring trials with various fast food franchise operations; and have received very positive feedback from our partners in regards to the application we supplied to the U.S. Navy."

The Company expects to make additional announcements over the next several weeks.

About Syscan International Inc.

Syscan is a unique supply chain solution provider that delivers integrated real-time tracking and tracing systems that improve business efficiency through Radio Frequency Identification (RFID). Its standardized supply chain solutions include traceability, temperature monitoring and quality control methodologies for the food, pharmaceutical and healthcare sectors. Shares of Syscan trade on the TSX Venture Exchange under the symbol SYA. There are approximately 39.5 million shares outstanding.

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For the three months ended March 31

2006 2005
3 months 3 months

$ $
SALES 294,076 789,207

COST OF SALES 139,772 559,630

GROSS PROFIT 154,304 229,577

Selling expenses 111,447 149,847
General and administrative expenses 284,730 273,656
Financial expenses 3,578 14
Depreciation of fixed assets 7,200 11,793
Depreciation of intangibles 10,809 5,288
Loss (gain) on exchange 4,807 (7,692)

422,571 432,906

OPERATING LOSS (268,267) (203,329)


NET LOSS (361,587) (260,606)

The TSX Venture Exchange has not reviewed this release and it does not accept responsibility for its adequacy or accuracy.

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