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Matrikon reports lower income in second quarter 2007

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Q2-2007 Highlights
• Q2 revenue of $17.25 million; $36.05 million year-to-date
• Q2 net income of $0.31 million or $0.01 per share; $2.11 million or $0.07 per share year-to-date
• Gross margin of 58% in the quarter and year-to-date

Edmonton, AB - April 13, 2007 - Matrikon reported financial results for the second quarter of fiscal year 2007, which ended February 28, 2007.

Matrikon president & CEO Amin Rawji commented on the quarter: "We continue to transition our business to focus on Matrikon solutions. This transition has not happened as quickly as we would like; however our growth opportunities do remain strong.

"We remain on track with many of our key strategies: we continue to post solid software license revenue; we completed two acquisitions in the quarter to complement our geographic and technology growth strategies; and we closed two MI3 contract agreements in the quarter.

"Our transition from low to high margin consulting business has been slow as we have not replaced low margin system integration work in North America with higher margin work as quickly as expected. Employees involved in the system integration work have been retrained to focus on the implementation of high margin Matrikon solutions."

Second quarter revenue was $17.25 million compared to $17.89 million in the second quarter of 2006. Net income in the second quarter was $0.31 million, or $0.01 per share, compared to $1.23 million, or $0.04 per share in the comparable period of fiscal year 2006. Second quarter net income was increased by $0.44 million or $0.01 per share net of tax for foreign currency translation gains versus a decrease to net income of $0.64 million or $0.01 per share net of tax in Q2-2006.

Year-to-date revenue was $36.05 million compared to $37.24 million in 2006. Year-to-date net income was $2.11 million, or $0.07 per share, compared to $2.71 million, or $0.09 per share in the comparable period of fiscal year 2006. Year-to-date net income was increased by $1.23 million or $0.03 per share net of tax for foreign currency translation gains versus a decrease to net income of $1.34 million or $0.03 per share net of tax in the first half of fiscal 2006.

Quarter Highlights:
• Matrikon completed the acquisition of Industrial Control Software Limited (ICS) on December 15, 2006. ICS was a profitable private company based in Matlock, England. ICS further extends Matrikon’s presence in the strategic European market, and has complementary technology and a solid customer base.
• Matrikon completed the acquisition of Axonwave Software Inc. a private technology company. Axonwave’s Content Intelligence System for analyzing unstructured data (such as word processing documents, email and PDF files) complements Matrikon’s industrial intelligence infrastructure
• Nizar J. Somji returned to Matrikon’s management team as interim chief financial officer on February 12, 2007. Nizar founded Matrikon in 1988 and was chief executive officer until December 2005 at which time he retired to become Chairman of Matrikon’s board. Former CFO, Tariq Malik left Matrikon to pursue other opportunities.

MD&A and Financial Statements
The complete Management’s Discussion and Analysis and Financial Statements for the current quarter can be found on Matrikon’s website at http://www.matrikon.com/corporate/investors/financial/q-reports.aspx or by contacting Nicole Sayler at 1-877-628-7456 extension 4010.

Conference Call Friday, April 13 at 8:00 am Eastern
Matrikon President and CEO Amin Rawji and CFO Nizar J. Somji will hold a conference call to discuss second quarter results on Friday, April 13 at 8:00 am Eastern time (6:00 am Mountain time). To participate live, call 416-644-3416 in the Toronto area and 1-800-732-9303 for all other areas.

A replay will be available until midnight on Tuesday, April 24, 2007. To access the playback service, please dial 416-640-1917 in Toronto or 1-877-289-8525 elsewhere, reservation number 21225478 followed by the pound sign.

The conference call will also be webcast and podcast at
www.newswire.ca/en/webcast/viewEvent.cgi?eventID=1789260

Request more information
Phone Inquiry: 780-448-1010
Go to company's web site

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