Epic Data International Inc.
TSX VENTURE : EKD

Epic Data International Inc.

February 27, 2008 18:34 ET

Epic Data Announces First Quarter Results

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 27, 2008) - Epic Data International Inc. (TSX VENTURE:EKD) today announced financial results for its first quarter ended December 31, 2007.

Financial Summary

- Q1 2008 revenue of CDN $1.8 million, down from CDN $2.9 million in Q1 2007.

- Q1 gross margin percentage of 47%, down from 50% in Q1 2007.

- Q1 operating expense of CDN $1.1 million, down from Q1 2007 levels of CDN $1.64 million.

- Q1 net loss of CDN $343,000, compared to a net loss in Q4 2007 of CDN $188,000.

- December 31, 2007 cash position of CDN $563,000, down from the quarter's opening position of CDN $759,000.

- December 31, 2007 contracted sales backlog of CDN $3.6 million, down from the quarter's opening backlog position of CDN $4.2 million.

Subsequent to quarter end, on February 27, 2008, the Company announced that it was in the process of finalizing a CDN $4.8 million data collection system contract with a U.S. defense contractor. No financial impact on Q1 results, system scheduled for substantial completion by end of September 2008.

To support working capital requirements driven by the pending Q2 contract win, payment terms on the Company's existing financing facility were amended. Any outstanding draws on the CDN $500,000 operating facility are now repayable by July 31, 2008 (versus original date of June 2009) and the $1.0 million principal amount is now repayable by December 2008 (versus June 2009) if certain conditions related to the new contract are satisfied.

"These first quarter results highlight the importance of our current initiatives targeted to improve top-line performance," said James Dodds, Epic Data's President and CEO. "With the current year's focus on marketing and sales, we are targeting our first fiscal year of sequential revenue growth in a number of years. Last year's focus was on increasing the effectiveness and efficiency of our integration services and product development organizations and we've achieved significant benefits from these efforts."

About Epic Data International Inc.

For over 30 years Epic Data has been a leader in automatic identification and data collection solutions for the world's most progressive organizations.

In aerospace and defense, industrial equipment, automotive and technology, our systems are used to increase plant productivity and production velocity while identifying the continuous improvement initiatives vital to winning in today's competitive manufacturing environments.

People and technology make Epic Data a global leader in automated data collection solutions for the extended enterprise.

Note: Forward-looking statements in this news release are based on current expectations of management. Epic Data cautions investors that, due to risks and uncertainties, actual events may differ materially from current expectations.



EPIC DATA INTERNATIONAL INC.
Consolidated Balance Sheets

(Thousands of Canadian dollars)
As at
December 31 September 30
2007 2007
(unaudited) (audited)
---------------------------

Assets:

Current assets
Cash and cash equivalents $ 591 $ 759
Accounts receivable - Net 1,511 1,546
Inventory 221 180
Prepaid expenses 590 669
------------ ------------
2,913 3,154

Prepaid expenses 289 421
Capital assets 234 271

------------ ------------
$ 3,436 $ 3,846
------------ ------------
------------ ------------

Liabilities and Shareholders' Deficiency

Current liabilities:
Accounts payable and accrued liabilities $ 1,472 $ 1,362
Deferred revenue 2,168 2,328
------------ ------------
3,640 3,690
------------ ------------

Related party loan, net of equity portion
of $44 (September 30, 2007 - $51) 956 949
Deferred Revenue 396 429

Deficiency in assets:
Share capital and contributed surplus 59,081 59,072
Deficit (60,637) (60,294)
------------ ------------
(1,556) (1,222)
------------ ------------

$ 3,436 $ 3,846
------------ ------------
------------ ------------

Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted for Fiscal 2008.


EPIC DATA INTERNATIONAL INC.
Consolidated Statements of Operations, Comprehensive Income (Loss) and
Deficit

(Thousands of Canadian dollars except per share amounts - unaudited)

Three months ended
December 31
---------------------------

2007 2006
------------ ------------

Revenue $ 1,773 $ 2,899

Cost of sales 938 1,447

------------ ------------
Gross margin 835 1,452

Gross margin percentage 47% 50%

Operating expenses:
Selling, marketing and administrative 1,005 1,408
Product development 137 235
------------ ------------
1,142 1,643
------------ ------------

Loss before undernoted items (307) (191)

Other expenses (income):
Amortization of capital assets 54 70
Unused leased facilities - (108)
Net finance charges 27 35
Other Income (45) -
------------ ------------
36 (3)
------------ ------------

Net income (loss) and comprehensive income
(loss) for the period (343) (188)

Deficit, beginning of period (60,294) (60,693)

------------ ------------
Deficit, end of period $ (60,637) $ (60,881)
------------ ------------
------------ ------------

Weighted average number of shares 12,897 12,901

Earnings (loss) per share $ (0.03) $ (0.01)

Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted for Fiscal 2008.


EPIC DATA INTERNATIONAL INC.
Consolidated Statements of Cash Flows

(Thousands of Canadian dollars except per share amounts - unaudited)

Three months ended
December 31
---------------------------
2007 2006
------------ ------------

Cash provided by (used in):

Operating:
Loss for the period $ (343) $ (188)
Items not involving cash:
Amortization of capital assets 54 70
Provision for unused leased facilities - (108)
Accretion of related party loan 7 16
Stock-based compensation expense (recovery) 9 (39)
Change in non-cash operating working capital:
Accounts receivable 35 (2,003)
Inventory (41) 49
Prepaid expenses 211 (160)
Accounts payable & accrued liabilities 110 (287)
Deferred revenue (193) 1,765
------------ ------------
(151) (885)

Investing:
Net acquisition of capital assets (17) -
Cash equivalents pledged as security - 386
------------ ------------
(17) 386

Increase (decrease) in cash and cash
equivalents (168) (499)

Cash and cash equivalents, beginning of period 759 618

------------ ------------

Cash and cash equivalents, end of period $ 591 $ 119
------------ ------------
------------ ------------

The Company's cash position consists of:
Cash and cash equivalents $ 591 $ 119
Cash and cash equivalents pledged as security - 1,600
------------ ------------
Cash position $ 591 $ 1,719
------------ ------------
------------ ------------

Supplementary information:
Interest paid $ 35 $ 35
Interest received $ 5 $ 16

Certain comparative figures have been reclassified to conform with the
financial statement presentation adopted for Fiscal 2008.

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