SYSCAN INTERNATIONAL INC.

SYSCAN INTERNATIONAL INC.

March 01, 2005 17:18 ET

Syscan Growth Continues as Revenues Jump 62%


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: SYSCAN INTERNATIONAL INC.

TSX VENTURE SYMBOL: SYA

MARCH 1, 2005 - 17:18 ET

Syscan Growth Continues as Revenues Jump 62%

MONTREAL, CANADA--(CCNMatthews - March 1, 2005) - Syscan International
Inc. (TSX VENTURE:SYA) today announced its results for the second
quarter of fiscal 2005 (December 31).

Revenues jumped to $1,147,235 in the quarter compared to $708,547 in the
previous year, an increase of 62%. Gross margins were 35%.

Operating expenses rose to $558,933 compared to $365,115 in fiscal 2004.
As anticipated, the increase reflects a rise of $65,403 in selling
expenses as the company added personnel and ramped up its sales
initiatives in expectation of accelerating demand over the next several
years. Similarly, administrative expenses rose $86,483.

The company recorded a quarterly operating loss of $153,933 including a
foreign currency loss of $49,567 caused by the rise of the Canadian
dollar versus its U.S. counterpart. During the quarter, approximately
77% of sales were made in U.S. currency as the company experienced
substantial growth outside of the country. As of December 31, working
capital stood at $1,696,083 as compared to $1,771,243 in the previous
year; and the company remained free of bank debt.

Mr. Axel Striefler, President of the company said, "During the third
quarter of last year we made the strategic decision to ramp up selling,
marketing and administrative expenses in anticipation of the launch of
several new offerings in RFID based solutions and a growing acceptance
in the supply chain of RFID in general. Correspondingly, we are pleased
with our sales performance during the quarter, as we continued to make
headway in our plan to become a leading traceability provider to the
food industry. We have recently announced new successes in the bakery
industry, meat processing and as of yesterday our Province of Quebec
traceability initiative. Highlights of the quarter include: a sales
increase of 60% over the first quarter of this year, well above the 50%
that we had previously indicated. Additionally, margins improved over
the first quarter of this year, as did bottom line performance. It is
also worthy of note that but for the unusual strength of the Canadian
dollar, our quarterly operating loss would have come in at approximately
$100,000; a solid improvement over the first quarter."

Mr. Striefler continued, "Our traceability solutions are built in such a
way that they can easily be adapted to a variety of vertical markets
such as the Health Sciences sector which we have recently announced. In
coming quarters we will continue to press forward on the exciting
opportunities that lie ahead."

In further corporate developments, the company announced that all of the
outstanding share purchase warrants (1,715,834 @ $.20) from its February
2003 private placement have been exercised for a total consideration of
$343,166.80 and accordingly an equal number of common shares have been
issued to the warrant holders. The company now has 33,345,880 common
shares outstanding.

About Syscan

Syscan is an Applications Solutions Provider of RFID based business
efficiency and risk management solutions for a variety of vertical
markets. Its standardized supply chain solutions include traceability,
temperature monitoring and quality control methodologies for the food,
pharmaceutical and health care sectors, transportation and automobile
production.

"The TSX Venture Exchange has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release."



SYSCAN INTERNATIONAL INC.

CONSOLIDATED STATEMENT OF LOSS LOSS AND DEFICIT
For the three months period ended December 31, 2004
(Unaudited)


--------------------------------------------------------------------
2005 2004
$ $
SALES 1,147,235 708,547

COST OF SALES 742,552 410,373
--------------------------------------------------------------------

GROSS PROFIT 404,683 298,174
--------------------------------------------------------------------

EXPENSES
Selling expenses 184,392 118,989
General and administrative expenses 281,928 195,445
Remuneration on the basis of shares 22,056 -
Financial expenses 4,019 5,002
Depreciation of fixed assets 11,629 12,099
Depreciation of intangibles 5,025 3,831
Loss on exchange 49,567 29,749
--------------------------------------------------------------------
558,616 365,115
--------------------------------------------------------------------

OPERATING LOSS (153,933) (66,941)

RESEARCH AND DEVELOPMENT COSTS (61,901) (46,128)
--------------------------------------------------------------------

NET LOSS (215,834) (113,069)
--------------------------------------------------------------------

Amounts per share (0.0068) (0.0040)

Number of issued and outstanding shares 31,630,046 28,122,141


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Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Syscan International Inc.
    Darrell Munro BBA. LL.B
    (613) 762-4262
    (514) 521-0949 (FAX)
    dmunro@syscan.com
    or
    Customer information
    1-888-479-7226
    info@syscan.com
    www.syscan.com
    or
    Renmark Financial Communications Inc.
    Investor Relations
    Barry Mire/Sylvain Laberge
    (514) 939-3989
    (514) 939-3717 (FAX)
    bmire@renmarkfinancial.com
    slaberge@renmarkfinancial.com
    The TSX Venture Exchange has not reviewed and does not accept
    responsibility for the adequacy or accuracy of this release.