SOURCE: SYSTRAN

August 05, 2005 03:00 ET

SYSTRAN : First Semester 2005 Interim Report

Paris la défense Cedex -- (MARKET WIRE) -- August 5, 2005 -- - Consolidated Net Income of 1,554 KE : +16.0%



- Total work orders of 4,055 KE : + 170.0 %



- Sales of 4,505 KE: -22.2%



August 5th 2005 - SYSTRAN, the leading provider of language translation technologies today announced consolidated financial results for its first semester ended June 30, 2005.


+-------------------------+---------------+--------------+---------------+
|Consolidated and Audited |  1st semester |  1st semester|  Annual change|
|Accounts                 |               |              |               |
+-------------------------+---------------+--------------+---------------+
|(in KE)                  |           2005|          2004|    2005 / 2004|
+-------------------------+---------------+--------------+---------------+
|                         |         (IFRS)|        (IFRS)|               |
+-------------------------+---------------+--------------+---------------+
|Sales                    |          4,505|         5,791|         -22,2%|
+-------------------------+---------------+--------------+---------------+
|Operating Income         |          1,469|         1,585|          -7,3%|
+-------------------------+---------------+--------------+---------------+
|%                        |         +32.6%|        +27.4%|               |
+-------------------------+---------------+--------------+---------------+
|Net Income - Group’s     |          1,554|         1,340|         +16.0%|
|share                    |               |              |               |
+-------------------------+---------------+--------------+---------------+
|%                        |         +34.5%|        +23.1%|               |
+-------------------------+---------------+--------------+---------------+


SYSTRAN focused its efforts on Software Publishing instead of new contracts for Professional Services during the first semester 2005.



Software Publishing represents 73.7% of total sales during this period as compared with 45.5% in 2004.



Consolidated sales for the first half of the year amounted to 4,505 KE, a decline of -22.2% as compared with the first semester 2004.



The Company increased its profitability with a 32.6% margin compared as with 27.4% in the first semester 2004. Positive operating income totaled +1,469 KE on June 30, 2005.



The Company's cash position rose to 9,447 KE on June 30, 2005, as compared with 7,995 KE on December 31, 2004.



- Transfer to IFRS Accounting Standards



These financial statements represent the Company's first published financial statements compliant with the IFRS Accounting Standards (International Financial Reporting Standards). The Company has applied IFRS 1 standard, " First time Adoption of International Financial Reporting Standards " for the preparation of these financial statements.



A detailed description of IFRS' impact on the Company's financial statements, particularly as relates to the shareholders' equity as of June 30 and December 31, 2004, appears in the notes appended to the consolidated accounts of June 30, 2005 that will be published in the BALO.



- Activities - First Semester 2005


+---------------------+------------+--------+------------+--------+
|                     |1st semester|   In   |1st semester|   In   |
+---------------------+------------+--------+------------+--------+
|In KE                |        2005|       %|        2004|       %|
+---------------------+------------+--------+------------+--------+
|                     |            |of total|            |of total|
+---------------------+------------+--------+------------+--------+
|Software Publishing  |       3,322|   73.7%|       2,634|   45.5%|
+---------------------+------------+--------+------------+--------+
|Professional Services|       1,183|   26.3%|       3,157|   54.5%|
+---------------------+------------+--------+------------+--------+
|Consolidated Sales   |       4,505|  100.0%|       5,791|  100.0%|
+---------------------+------------+--------+------------+--------+
+---------------------+------------+--------+------------+--------+

+-------------+
|Annual change|
+-------------+
| 2005 / 2004 |
+-------------+
|             |
+-------------+
|       +26.1%|
+-------------+
|       -62.6%|
+-------------+
|       -22.2%|
+-------------+
+-------------+


The sales generated from software licenses amounted to 3,322 KE, an increase of +26.1% as compared with the first semester 2004.



- Outlook



Unearned revenue and software license orders for the Software Publishing business unit amounted to E 2.4 M at June 30, 2005.



The Professional Services business unit maintains a significant inventory of work orders, totaling E 1.6 M.



Total work orders and unearned revenue amount to 4.0 ME, an increase of 170% when compared with the status at December 31, 2004.



The Company anticipates an increase in the sales of software licenses during the second half of 2005 as it continues to reinforce its sales and marketing teams.



- About SYSTRAN



SYSTRAN is the leading provider of the world's most scalable and modular translation software. SYSTRAN's expertise spans over three decades of building customized machine translation solutions for global corporations, portals, governments and public administrations through open and robust architecture.



Its core technology powers language translation solutions for the Internet, PCs and network infrastructures that facilitate communication in 40 language pairs and in 20 specialized domains. SYSTRAN's technology is developed under Linux and runs on all Unix platforms, MacOS X and Microsoft Windows.



SYSTRAN is currently developing and/or enhancing the following new or existing language pairs: Arabic, Farsi, Hungarian, Polish, Czech, Danish and Finnish.



SYSTRAN is headquartered in France and has a subsidiary in California, USA.



SYSTRAN (Code ISIN FR0004109197, Bloomberg: SYST NM, Reuters: SYTN.LN) is listed on Euronext Paris, Nouveau Marché, and is member of Euronext's Next Economy segment.



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 2005 ending on September 30, 2005 will be announced on October 28th, 2005.



This Press Release is available for download at:



http://www.systransoft.com/company/investors/financial_releases.html


+-------------------------+-------------------+-------------------+------------+
|(In KE)                  |  1st semester 2005|  1st semester 2004|  Year 2004 |
+-------------------------+-------------------+-------------------+------------+
|(6 month)                |          (6 month)|                   |  (12 month)|
+-------------------------+-------------------+-------------------+------------+
|Net sales                |              4,505|              5,791|      10,189|
+-------------------------+-------------------+-------------------+------------+
|Other operating revenue  |                  9|                  0|           0|
+-------------------------+-------------------+-------------------+------------+
|Total revenue from       |              4,514|              5,791|      10,189|
|operations               |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Cost of sales and other  |            (1,423)|            (2,004)|     (3,507)|
|external expenses        |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Taxes and duties         |               (51)|               (39)|        (81)|
+-------------------------+-------------------+-------------------+------------+
|Wages and salaries       |            (1,870)|            (1,793)|     (3,367)|
+-------------------------+-------------------+-------------------+------------+
|Depreciation and         |                (7)|              (262)|       (202)|
|amortization (net)       |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Other income / (expenses)|                 79|               (20)|        (90)|
+-------------------------+-------------------+-------------------+------------+
|Current operating income |              1,242|              1,673|       2,942|
+-------------------------+-------------------+-------------------+------------+
|Other operating income / |                227|               (88)|       (184)|
|(expenses)               |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Operating income         |              1,469|              1,585|       2,758|
+-------------------------+-------------------+-------------------+------------+
|Financial income from    |                199|                 36|        (69)|
|cash activities          |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Financing expenses       |                (4)|                (2)|         (2)|
+-------------------------+-------------------+-------------------+------------+
|Net financing cost       |                195|                 34|        (71)|
+-------------------------+-------------------+-------------------+------------+
|Other financing income / |                405|                 76|          26|
|expenses                 |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Profit before tax        |              2,069|              1,696|      2,713)|
+-------------------------+-------------------+-------------------+------------+
|Income tax expenses      |              (515)|              (355)|        (34)|
+-------------------------+-------------------+-------------------+------------+
|Profit from operations   |              1,554|              1,340|       2,679|
+-------------------------+-------------------+-------------------+------------+
|Minority interest        |                  0|                  0|           0|
+-------------------------+-------------------+-------------------+------------+
|Net income / (loss) –    |              1,554|              1,340|       2,679|
|Group’s share            |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|Earning / (loss) per     |  1st semester 2005|  1st semester 2004|        2004|
|share                    |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|On the basis of the      |                   |                   |            |
|average number of shares |                   |                   |            |
|in circulation:          |                   |                   |            |
+-------------------------+-------------------+-------------------+------------+
|- Number of common shares|          9,833,695|          9,833,695|   9,833,695|
+-------------------------+-------------------+-------------------+------------+
|- Euros per share        |               0.16|               0.14|        0.27|
+-------------------------+-------------------+-------------------+------------+




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