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Matrikon announces Q2 results

Edmonton, Alberta – April 11, 2008 - Matrikon reported financial results for the second quarter of fiscal year 2008, which ended February 29, 2008.

Second quarter revenue was $19.44 million compared to $17.25 million in Q2-07 and $19.89 million in Q1-08 (adjusted to reflect current presentation of interest income). Net income in the second quarter was $1.81 million or $0.06 per share, compared to $0.31 million or $0.01 per share in Q2-07 and $2.24 million or $0.07 per share in Q1-08.

Year-to-date revenue was $39.33 million compared to $36.05 million in the first half of FY-07. YTD net income was $4.05 million or $0.13 per share, compared to $2.11 million or $0.07 per share in the first half of FY-07.Matrikon president, CEO and interim CFO Nizar J. Somji commented on the quarter: “Achieving the best Q2 in our history is a testament to the dedication and commitment of everyone at Matrikon. We have remained focused, and each individual has worked diligently to deliver on the strategy in a quarter that is often challenging from a results perspective.

With our cost base stabilized, we are now in a position to direct our attention and our energy on top line growth. Some key solutions that we expect to deliver to our clients over the next two quarters will form the framework of new opportunities and future growth.”

Matrikon’s board of directors also declared a quarterly dividend of $0.03 per common share to all shareholders of record on April 25, 2008, payable on May 9, 2008.

“We are pleased to announce Matrikon’s first dividend, following several quarters of strong cash generation and a growing cash balance,” stated Hugh Bolton, Chair of Matrikon’s board. “The commencement of a quarterly dividend reflects the belief of the board that Matrikon is back on the right track and that we have confidence in the future.”

Additional Highlights

Strong software license and support revenue contributed to near record quarterly revenue in Q2-08, a quarter which is traditionally light on revenue and net income as it has fewer working days and spans the holiday period.

Gross margin was 54%, comprised of 91% gross margin on software license revenue, 95% on support revenue, 37% on consulting revenue and 25% on equipment revenue.

Overhead expense reductions were maintained in the quarter at $7.92 million or 41% of revenue compared to $10.08 million or 58% of revenue in Q2-07. Year-to-date overhead expenses were $15.74 million or 40% compared to $19.33 million or 54% of revenue in the first six months of FY-07.

Cash generated by operations was $5.82 million compared to $0.37 million in Q2-07. Year-to-date, cash generated by operations was $8.34 million compared to $3.07 million in the first six months of FY-07.

The rolling 12-month average collection period (on trade receivables) improved to 78 days at the end of Q2-08 compared to 86 days at the end of Q2-07 and 84 days at the end of Q1-08. This improvement is the result of an increased focus on collections.

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