Zi Corporation

Zi Corporation

March 15, 2005 08:01 ET

Zi Corporation Reports 2004 Year-End, Fourth Quarter Results


NEWS RELEASE TRANSMITTED BY CCNMatthews

FOR: ZI CORPORATION

TSX SYMBOL: ZIC
NASDAQ SYMBOL: ZICA

MARCH 15, 2005 - 08:01 ET

Zi Corporation Reports 2004 Year-End, Fourth Quarter
Results

CALGARY, ALBERTA--(CCNMatthews - March 15, 2005) - Zi Corporation
(NASDAQ:ZICA) (TSX:ZIC), a leading provider of intelligent interface
solutions, today reported results for its fiscal year and fourth quarter
ended December 31, 2004. Zi Corporation total revenue in 2004 increased
26 percent over total revenue in 2003 and revenue for the Company's core
Zi Technology business unit in 2004 rose 30 percent over 2003 levels.
(Unless otherwise indicated, all monetary amounts in this news release
are in U.S. dollars.)

President and CEO Michael D. Donnell said that 2004 was marked by
significant improvements in the functionality, language data bases and
overall quality of the Company's product lines, the continued
development and near completion of a major new product and the
conclusion of work needed to secure a key new customer at year end.
Additionally, the strength of the Company's management team was greatly
enhanced during the year as experienced senior level executives were
hired to fill key marketing, sales, development and operations functions.

Total Zi Corporation revenue for the 12 months ended December 31, 2004
was $13.4 million, up from $10.6 million in 2003. The net loss for 2004,
which included a number of one-time, non-cash charges, was $2.4 million,
or a $0.06 loss per basic and diluted share, versus a net loss in 2003
of $2.9 million, or a loss per basic and diluted share of $0.08. The
2004 results included non-cash compensation expense of $1.4 million for
the issuance of restricted stock units and for the issuance of
non-employee stock options, and a $2 million impairment charge to make
provision on a note receivable.

Excluding these non-cash compensation and impairment charges, the
Company would have recorded a profit for 2004 of approximately $1
million, a $3.4 million improvement compared to 2003 on a similar basis.
This is a non-GAAP measure which management believes is a useful measure
of performance because the impairment charge is a non-recurring item and
non cash compensation expense was significantly affected by a large and
infrequent grant of restricted stock units, rather than reflective of
the operations of the Company. The results for 2003 include $516,000 of
non-cash compensation expense. Gross margin as a percentage of revenue
in 2004 was 96.5 percent compared to 95.9 percent in 2003.

The Company's balance sheet as of December 31, 2004 showed cash and cash
equivalents of $12.9 million, total assets of $21.7 million, and
shareholders' equity of $15.7 million. This compares to cash and cash
equivalents of $2.4 million, total assets of $10.7 million, and
shareholders' equity of $4.3 million as of December 31, 2003. Zi
Corporation continues to strengthen its balance sheet as cash and cash
equivalents as of February 28, 2005 had grown to approximately $15.3
million, an increase from the 2004 year-end balance of more than $2.4
million

Revenue for the Company's Zi Technology business unit in 2004 was $12.9
million, up 30 percent from $9.9 million in the prior year. Revenue
growth in the 2004 fourth quarter was impacted by a decrease in
royalties from two of the Company's large, existing customers and a
sequential decline in professional services fees from the 2004 third
quarter. Operating profit for the Zi Technology business unit for all of
2004 was $4.3 million, up from $1.9 million in 2003. Revenue from the
Company's e-Learning segment in 2004 was $504,000, compared to $684,000
in 2003.

"Zi Corporation had a strong year in 2004, revenue grew substantially
year over year, we released Version 7 of eZiText, a greatly enhanced
version of our predictive text input technology, and we established an
important business relationship with the world's largest handset maker,
Nokia. Our bolstered senior management team and our much improved
balance sheet position us for what we believe will be a very good 2005.

"Furthermore in the past two months we have acquired the assets of an
internationally known handwriting recognition company, Decuma AB of
Sweden that expands our suite of product offerings and complements our
predictive text technologies. For example, Zi's comprehensive language
data bases, when integrated into Decuma's proprietary handwriting
recognition software, can enhance our suite of handwriting recognition
solutions with such features as word prediction and completion and the
learning of user word preferences, which should give us a significant
competitive advantage. And just last month at the 3GSM World Congress in
France we launched Qix™, a revolutionary new technology designed to
drive revenue for the carriers and make it much easier for mobile
handset users to access their phone's full set of features," Donnell
added.

Zi Corporation total revenue for the fourth quarter of 2004 was $3.2
million, with a net loss of $1.9 million, or a $0.04 loss per basic and
diluted share, compared to total revenue of $3.6 million in 2003 with a
net loss of $18,000, or a $0.00 loss per basic and diluted share. The
2004 fourth quarter results included a $2 million impairment charge to
make provision on a note receivable.

Excluding this impairment charge and adjustments for non-cash
compensation, the Company would have recorded a profit for the 2004
fourth quarter of approximately $17,000. Gross margin as a percentage of
revenue was 96.9 percent in 2004 fourth quarter compared to 95.7 percent
in the fourth quarter of the prior year.

Donnell further added that the Company believes the reduction in revenue
growth in the 2004 fourth quarter was largely due to a number of product
and corporate challenges faced by the Company in late 2003 and their
affect on some customers' buying decisions at that time. Since it is
often more than a year from the time a customer decides to buy Zi's
products to when shipments of handsets embedded with those products
begin, it can take four or five quarters before revenue is impacted.

"The business is now well capitalized, our financial strength has
improved significantly and we have successfully launched new versions of
eZiText and strengthened our sales and marketing organization," Donnell
said. "Our new agreements signed in the last 12 months, together with
the market acceptance of the new versions of our products, are solid
evidence of the progress we have made, all of which bode well for the
future. Furthermore, with the addition of Decuma and handwriting
recognition we have broadened the product line. We are convinced that
these factors, combined with the launch of Qix and the future release of
other key products, can drive renewed revenue growth and profitability
in 2005 and beyond."

There were 127 new device models embedded with eZiText released into the
market during the 2004 fourth quarter and a total of 406 for the year.
The number of new models with Zi technology embedded is a leading
indicator of the progress the Company is making in expanding its
potential for the generation of revenue, with models released in the
later part of the year reflecting possible sources of incremental
revenue in the mid to later half of 2005.

Selling, general and administrative expense ("SG&A") in the three months
ended December 31, 2004 was approximately $1.7 million as compared to
$2.2 million in the prior year period, and SG&A expense for all of 2004
was $9.3 million, compared to $8.1 million in 2003. SG&A expense for
2004, excluding $1.4 million in non-cash compensation expense related to
the issuance of restricted stock units and non-employee stock options
increased by approximately $300,000 from the prior year.

Product research and development expense for the 2004 fourth quarter and
year were $921,000 and $2.4 million, respectively, compared to $579,000
and $2.1 million in the respective year-earlier periods. Gross
expenditures on product development before capitalization of certain
software costs in the 2004 fourth quarter and year increased by $669,000
and $1.7 million over the respective prior year periods, reflecting the
Company's focused efforts on developing dramatically new and improved
language database software. For the year ended December 31, 2004, the
Company capitalized $1.7 million in software development costs compared
to $238,000 in 2003.



Executive Summary of Operating Results

Three Months Ended Twelve Months Ended
(in thousands except per December 31, December 31,
share amounts) 2004 2003 2004 2003
---------------------------------------------------------------------
Revenue $ 3,242 $ 3,630 $ 13,403 $ 10,603

Gross margin 3,140 3,474 12,931 10,168

Net income (loss) (1,911) (18) (2,388) (2,931)

Total assets $ 21,699 $ 10,686 $ 21,699 $ 10,686

Net income (loss) per share
- basic and diluted $ (0.04) $ (0.001) $ (0.06) $ (0.08)

Outstanding shares,
weighted average 43,984 39,360 41,373 38,720

Outstanding shares, end
of period 45,225 39,372 45,225 39,372
---------------------------------------------------------------------


All dollar amounts are in United States dollars and in accordance with
accounting principles generally accepted in the United States of
America. This information should be read in conjunction with the
Company's consolidated financial statements and notes.

Change to Notes to Financial Statements Regarding Accounting for Stock
Options:

The Company adopted US GAAP as the basis of presenting its financial
statements effective December 31, 2003. Prior thereto, the Company
presented its financial statements in accordance with Canadian GAAP.

As permitted under accounting principles generally accepted in the
United States of America ("US GAAP") in respect of accounting for the
grant of the Company's employee and director stock options, the Company
has elected to use the intrinsic value method. Under this method,
companies are not required to record any compensation expense relating
to the grant of options to employees or directors where the awards are
granted upon fixed terms with an exercise price equal to fair value at
the date of grant and the only condition of exercise is continued
employment. As such, companies that elect a method other than the fair
value method of accounting (such as the intrinsic method) are required
to disclose in the notes to the financial statements the pro forma net
loss and loss per share information as if the fair value method of
accounting had been used. The Company has included in the notes to its
interim and annual filings such supplemental information, as required.

Prior to the fourth quarter of 2003, Canadian generally accepted
accounting principles ("Canadian GAAP") allowed for accounting treatment
similar to US GAAP for stock option grants granted after December 31,
2001. In the fourth quarter of 2003, the Company adopted the fair-value
method of accounting for stock options under Canadian GAAP. The Company
adopted the fair-value based method prospectively, whereby compensation
cost is recognized for all options granted on or after January 1, 2003.
Under Canadian GAAP, the amounts recorded as stock compensation expense
are included in the determination of net loss in the financial
statements. As the Company's primary financial statements are prepared
in accordance with US GAAP, the effect of this GAAP reporting difference
was reported in the notes to the financial statements as a reconciling
difference between US and Canadian GAAP.

At December 31, 2004, the Company's stock based compensation expense has
been restated to better reflect the variety of vesting periods of its
stock option grants. In 2003 and the first three quarters of 2004, the
determination of the stock based compensation expense was based on
amortization periods that did not best reflect the variety of vesting
periods for the associated stock option grants. Accordingly, the Company
has restated its financial statement note disclosure for each of the
2003 quarterly and 2003 annual reported stock compensation expense to
reflect the appropriate amounts under US and Canadian GAAP; and the 2004
quarterly reported stock compensation expense and appropriate related
balances under US GAAP, as discussed in the following paragraphs.

Stock compensation expense under Canadian GAAP for the three months
ended March 31, June 30 and September 30, 2003, and year ended December
31, 2003 previously reported as $723,398, $884,303, $871,430 and
$2,252,852, respectively has been restated to $157,191, $559,257,
$594,874 and $1,679,224, respectively. As a result, pro forma net loss
for the three months ended March 31, June 30 and September 30, 2003 and
net loss for the year ended December 31, 2003, previously reported as
$1,845,476, $2,414,018, $1,132,420 and $5,021,508, respectively has been
restated to $1,279,269, $2,088,972, $855,864 and $4,447,880,
respectively. Similarly, pro forma net loss per share, for the three
months ended March 31, June 30 and September 30, 2003 and net loss per
share for the year ended December 31, 2003, previously reported as
$0.05, $0.06, $0.03 and $0.13 has been restated to $0.03, $0.05, $0.02
and $0.12, respectively. In addition, the shareholders equity under
Canadian GAAP as at December 31, 2003, previously stated as $2,028,241
would be restated to $2,601,869.

Stock compensation expense under US GAAP for the three months ended
March 31, June 30 and September 30, 2003, and year ended December 31,
2003 previously reported as $723,398, $884,303, $871,430 and $3,510,504,
respectively has been restated to $834,863, $1,198,753, $1,260,368 and
$4,640,744, respectively. As a result, pro forma net loss for the three
months ended March 31, June 30 and September 30, 2003 and year ended
December 31, 2003, previously reported as $1,845,476, $2,414,018,
$1,132,420 and $6,441,613, respectively has been restated to $1,956,941,
$2,728,468, $1,521,358 and $7,571,853, respectively. Similarly, pro
forma net loss per share, for the three months ended March 31, June 30
and September 30, 2003 and year ended December 31, 2003, previously
reported as $0.05, $0.06, $0.03 and $0.17, respectively, has been
restated to $0.05, $0.07, $0.04 and $0.20, respectively.

Stock compensation expense under US GAAP for the three months ended
March 31, June 30 and September 30, 2004 previously reported as
$567,378, $624,307 and $652,124, respectively, has been restated to
$981,750, $572,452 and $845,522, respectively. As a result, pro forma
net income (loss) for the three months ended March 31, June 30 and
September 30, 2004, previously reported as $(2,024,432), $(370,199) and
$73,374, respectively, has been restated to $(2,438,804), $(318,344) and
$(120,024), respectively. Similarly, pro forma net income (loss) per
share, for the three months ended March 31, June 30 and September 30,
2004, previously reported as $(0.05), $(0.01) and $0.002, respectively,
has been restated to $(0.06), $(0.01) and $(0.003), respectively.

Conference Call

As previously announced, Zi is conducting a conference call to review
its financial results today at 11:30 AM EST (Eastern). The dial-in
number for the call in North America is 1 800-500-3170 and
1-719-457-2733 for overseas callers. A live audio webcast and replay of
the call can be accessed for 10 days at the Company's website at
www.zicorp.com.

About Zi Corporation

Zi Corporation (www.zicorp.com) is a technology company that delivers
intelligent interface solutions to enhance the user experience of
wireless and consumer technologies. The company provides device
manufacturers and network operators with a full range of intuitive and
easy-to-use input solutions, including: eZiText® for one-touch
predictive text entry; eZiTap™ for intelligent multi-tap entry,
Decuma® for natural handwriting recognition and the new Qix™
service discover engine to enhance the user experience and drive service
usage and adoption. Zi's product portfolio dramatically improves the
usability of mobile phones, PDAs, gaming devices and set-top boxes and
the applications on them including SMS, MMS, e-mail and Internet
browsing. Zi supports its strategic partners and customers from offices
in Asia, Europe and North America. A publicly traded company, Zi
Corporation is listed on the Nasdaq National Market (ZICA) and the
Toronto Stock Exchange (ZIC).

This release may be deemed to contain forward-looking statements, which
are subject to the safe harbour provisions of the United States Private
Securities Litigation Reform Act of 1995. These forward-looking
statements include, among other things, statements regarding future
events and the future financial performance of Zi Corporation that
involve risks and uncertainties. Readers are cautioned that these
forward-looking statements are only predictions and may differ
materially from actual future events or results due to a variety of
factors, including: the growth trends in the input technology industry;
new product development; global economic conditions and uncertainties in
the geopolitical environment; financial and operating performance of
Zi's OEM customers and variations in their customer demand for products
and services; the ability to successfully acquire businesses and
technologies and to successfully integrate and operate these acquired
businesses and technologies; dependence on the introduction and market
acceptance of new product offerings and standards; rapid technological
and market change; matters affecting Zi Corporation's principal
shareholder; litigation involving patents, intellectual property, and
other matters; the ability to recruit and retain key personnel; Zi
Corporation's ability to manage financial risk; currency fluctuations
and other international factors; potential volatility in operating
results and other factors listed in Zi Corporation's filings with the
Securities and Exchange Commission. The financial information contained
in this release should be read in conjunction with the consolidated
financial statements and notes thereto included in Zi Corporation's most
recent reports on SEDAR, Form 20-F and Form 6-K, each as it may be
amended from time to time. Zi Corporation's results of operations for
the fourth quarter and year ended December 31, 2004 are not necessarily
indicative of Zi Corporation's operating results for any future periods.
Any projections in this release are based on limited information
currently available to Zi Corporation, which is subject to change.
Although any such projections and the factors influencing them will
likely change, except to the extent required by law, Zi Corporation will
not necessarily update the information. Such information speaks only as
of the date of this release.

Zi, Decuma, Qix, eZiTap and eZiText are either trademarks or registered
trademarks of Zi Corporation. All other trademarks are the property of
their respective owners.

TABLES FOLLOW



ZI CORPORATION
CONSOLIDATED BALANCE SHEETS

As of December 31 2004 2003
---------------------------------------------------------------------
(All amounts in United States
of America dollars except
share amounts)
---------------------------------------------------------------------

Assets
Current assets
Cash and cash equivalents $ 12,889,335 $ 2,366,885
Accounts receivable, net of allowance of
$154,108 (2003 - $507,640) 5,570,869 4,020,264
Accounts receivable from related party 43,629 33,187
Prepayments and deposits 414,994 399,767
---------------------------------------------------------------------
Total current assets 18,918,827 6,820,103

Notes receivable - 2,000,000
Capital assets - net 1,087,957 1,277,755
Intangible assets - net 1,692,087 587,720
Investment in significantly influenced
company - -
---------------------------------------------------------------------
$ 21,698,871 $ 10,685,578
---------------------------------------------------------------------
---------------------------------------------------------------------

Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities $ 3,081,280 $ 4,099,307
Deferred revenue 2,704,105 1,099,573
Notes payable - 1,000,000
Current portion of other long-term
liabilities 71,969 73,572
---------------------------------------------------------------------
Total current liabilities 5,857,354 6,272,452

Other long-term liabilities 92,361 132,033
---------------------------------------------------------------------
5,949,715 6,404,485
---------------------------------------------------------------------

Contingent liabilities, commitments and
guarantees

Shareholders' equity
Share capital
Unlimited number of Class A, 9%
convertible, preferred shares authorized
and no shares issued or outstanding - -
Unlimited number of common shares, no
par value, authorized, 45,225,190 (2003
- 39,371,560) issued and outstanding 106,025,634 93,957,652
Additional paid-in capital 2,114,190 601,744
Accumulated deficit (91,927,031) (89,538,832)
Accumulated other comprehensive loss (463,637) (739,471)
---------------------------------------------------------------------
15,749,156 4,281,093
---------------------------------------------------------------------
$ 21,698,871 $ 10,685,578
---------------------------------------------------------------------
---------------------------------------------------------------------

See accompanying notes to consolidated financial statements.



ZI CORPORATION
CONSOLIDATED STATEMENTS OF LOSS

Years ended December 31 2004 2003 2002
---------------------------------------------------------------------
(All amounts in United States of
America dollars except share amounts)
---------------------------------------------------------------------

Revenue
License and implementation
fees $ 12,898,838 $ 9,918,998 $ 6,480,938
Other product revenue 504,213 684,070 1,935,309
---------------------------------------------------------------------
13,403,051 10,603,068 8,416,247

Cost of sales
License and implementation
fees 362,562 349,824 251,613
Other product costs 109,252 85,711 803,424
---------------------------------------------------------------------
471,814 435,535 1,055,037

---------------------------------------------------------------------
Gross margin 12,931,237 10,167,533 7,361,210
---------------------------------------------------------------------

Operating expenses

Selling, general and
administrative (9,281,365) (8,137,551) (11,371,764)
Litigation and legal (833,197) (886,860) (7,511,908)
Product research and
development (2,350,141) (2,098,735) (2,780,180)
Depreciation and
amortization (926,886) (1,380,265) (2,226,572)
Impairment of note
receivable (2,000,000) - -
Impairment of goodwill - - (1,258,889)
Impairment of intangible
assets - - (1,457,405)
---------------------------------------------------------------------
Operating loss before
undernoted (2,460,352) (2,335,878) (19,245,508)

Interest on capital lease
obligation (25,558) (9,856) (88,614)
Other interest expense (30,839) (608,858) (125,976)
Interest income and other
income 128,550 23,483 182,360
Equity interest in loss of
significantly influenced
company - - (220,687)
---------------------------------------------------------------------
Loss from continuing
operations before income
taxes (2,388,199) (2,931,109) (19,498,425)
Income taxes - - -
---------------------------------------------------------------------
Loss from continuing
operations (2,388,199) (2,931,109) (19,498,425)

Discontinued operations
Loss from discontinued
operations - - (5,707,850)
---------------------------------------------------------------------
Net loss $ (2,388,199) $ (2,931,109) $ (25,206,275)
---------------------------------------------------------------------
---------------------------------------------------------------------

Basic and diluted loss
from continuing operations
per share $ (0.06) $ (0.08) $ (0.52)
Loss from discontinued
operations per share - - (0.15)
---------------------------------------------------------------------
Basic and diluted loss per
share $ (0.06) $ (0.08) $ (0.67)
---------------------------------------------------------------------
---------------------------------------------------------------------
Weighted average common
shares 41,373,309 38,719,786 37,767,000
Common shares outstanding,
end of period 45,225,190 39,371,560 37,914,250


See accompanying notes to consolidated financial statements.



ZI CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31 2004 2003 2002
---------------------------------------------------------------------
(All amounts in United States
of America dollars)

Net cash flow from (used
in) operating activities:
Net loss from continuing
operations $ (2,388,199) $ (2,931,109) $ (19,498,425)
Items not affecting cash:
Loss on dispositions of
capital assets 9,899 2,415 146,418
Depreciation and
amortization 926,886 1,380,265 2,226,572
Impairment of note
receivable 2,000,000 - -
Impairment of goodwill - - 1,258,889
Impairment of intangible
assets - - 1,457,405
Non-cash interest expense - 95,344 -
Non-cash compensation
expense 685,767 516,353 -
Non-cash consultant
compensation expense 685,631 - -
Equity in net loss of
significantly influenced
company - - 220,687
Decrease (increase) in
non-cash working capital (989,769) (370,608) 1,202,139
---------------------------------------------------------------------
Cash flow from (used in)
operating activities 930,215 (1,307,340) (12,986,315)
---------------------------------------------------------------------

Cash flow from (used in)
financing activities:
Proceeds from issuance of
common shares, net of
issuance costs 12,209,030 2,937,228 720,904
Settlement of note payable (1,000,000) (3,300,000) -
Issuance of note payable - 1,000,000 3,250,450
Payment of capital lease
obligations - (96,223) (104,900)
---------------------------------------------------------------------
Cash flow from financing
activities 11,209,030 541,005 3,866,454
---------------------------------------------------------------------

Cash flow from (used in)
investing activities:
Short-term investments - - 5,385,172
Purchase of capital assets (178,258) (133,297) (922,171)
Proceeds from capital
dispositions - 2,772 32,305
Software development costs (1,661,974) (237,618) (452,573)
Other deferred costs (52,397) (47,622) (152,339)
Acquisition of
subsidiaries net of bank
indebtedness - - (1,194,494)
Sale of subsidiary net of
cash given up - - (350,669)
---------------------------------------------------------------------
Cash flow from (used in)
investing activities (1,892,629) (415,765) 2,649,909
---------------------------------------------------------------------

Cash flow used by
discontinued operations - - (2,290,319)
Effect of foreign exchange
rate changes on cash and
cash equivalents 275,834 162,453 158,641
---------------------------------------------------------------------
Net cash inflow (outflow) 10,522,450 (1,019,647) (8,601,630)
Cash and cash equivalents,
beginning of year 2,366,885 3,386,532 11,988,162
---------------------------------------------------------------------
Cash and cash equivalents,
end of year $ 12,889,335 $ 2,366,885 $ 3,386,532
---------------------------------------------------------------------
---------------------------------------------------------------------

Non cash financing
activity
Equipment acquired under
capital lease $ 29,188 $ - $ 21,678
Acquisition of subsidiary $ - $ - $ 324,057
Components of cash and
cash equivalents
Cash $ 5,867,700 $ 2,366,885 $ 3,386,532
Cash equivalents $ 7,021,635 $ - $ -
Supplemental cash flow
information
Cash paid for interest $ 56,397 $ 523,370 $ 87,576
Cash paid for income taxes $ - $ - $ -



See accompanying notes to consolidated financial statements.
Selected Notes to the Consolidated Financial Statements


For the years ended December 31, 2004, 2003 and 2002

NATURE OF OPERATIONS

Zi Corporation (the "Company" or "Zi") is incorporated under the
Business Corporations Act of Alberta. Zi develops software designed to
enhance the usability of mobile and consumer electronic devices. Through
its e-Learning business segment which includes Oztime, English Practice
and an equity interest in Magic Lantern Group, Inc. ("MLG"), the Company
is also involved in e-Learning technology, content and customer service
as well as educational content and distribution channels to offer
learning management systems, interactive online courses and network
education solutions to meet diverse client requirements.

SIGNIFICANT ACCOUNTING POLICIES

The accompanying consolidated financial statements are prepared by
management in conformity with accounting principles generally accepted
in the United States of America ("US GAAP"), which conforms in all
material respects with Canadian generally accepted accounting principles
("Canadian GAAP"), except as disclosed in note 16 to the Company's
December 31, 2004 audited consolidated financial statements. Prior to
December 31, 2003, the primary consolidated financial statements of the
Company were prepared in accordance with Canadian GAAP with annual
reconciliation of the Company's financial position and results of
operations to US GAAP. Management elected to report in conformity with
US GAAP as of December 31, 2003 to provide information on a more
comparable basis with Zi's industry peers and to better assist with the
understanding of the financial statements to the majority of their
users, who are primarily in the United States of America. Effective
March 31, 2004, the Company initiated reporting its consolidated
financial statements in US dollars, with comparative periods restated to
US dollars.

-30-

Contact Information

  • FOR FURTHER INFORMATION PLEASE CONTACT:
    Investor Inquiries:
    Allen & Caron Inc
    Jill Bertotti
    (949) 474-4300
    jill@allencaron.com
    or
    Zi Corporation
    Dale Kearns
    Chief Financial Officer
    (403) 233-8875
    investor@zicorp.com
    or
    Media Inquiries:
    Allen & Caron Inc
    Len Hall
    (949) 474-4300
    len@allencaron.com