Syscan Imaging, Inc. Announces Third Quarter Financial Results

Syscan Imaging, Inc. Announces Third Quarter Financial Results

SAN JOSE, Calif., Nov. 30 /PRNewswire-FirstCall/ -- Syscan Imaging, Inc. (BULLETIN BOARD: SYII) , an OEM and private label manufacturer of mobile image scanning systems and image display solutions, today announced financial results for its third quarter ended September 30, 2004.

The Company's revenues increased to $1,954,684 for the three months ended September 30, 2004 from $1,729,405 for the same period in fiscal 2003, an increase of approximately 13%. Revenues decreased to $4,435,632 for the nine months ended September 30, 2004 from $4,454,362 for the same period in fiscal 2003. The increase for the three months ended September 30, 2004, is primarily attributable to an increase in the sales of the Company's A6 format scanner that is used for the scanning of identification and security cards. The decrease in revenues for the nine months ended September 30, 2004 as compared to the same period in fiscal 2003 is primarily due, and consistent with, the existing "soft" market conditions in Europe Gross profit increased to $651,060, or 33.3% of net revenues for the three months ended September 30, 2004 from $532,821, or 30.8% of net revenues for the same period in fiscal 2003. Gross profit increased to $1,476,709, or 33.3% of net revenues for the nine months ended September 30, 2004 from $1,276,137, or 28.6% of net revenues for the same period in fiscal 2003. The increase in gross profit for the three and nine months ended September 30, 2004 as compared to the same periods in fiscal 2003 are the result of the Company's continued penetration into the Small Office Home Office (SOHO) and Enterprise (corporations and organizations with greater than 500 employees) sectors, which yielded better gross margins during such periods.

The Company experienced a net profit of $53,374 for the three months ended September 30, 2004 and a loss of ($56,921) for the nine months ended September 30, 2004 compared to a profit of $333,676 and $721,476, respectively, during the comparable periods in 2003. The Company's profitability during the three months ended September 30, 2004 is primarily due to overall revenue growth, coupled with better gross margins. The Company's loss for the nine months ended September 30, 2004 is attributable to extraordinary expenses associated with the Bank Engine acquisition earlier this year, as well as the addition of human resources and R&D expenses associated with the Company's move into the image display market.

Darwin Hu, SYII's Chairman and Chief Executive Officer, reported, "We are comfortable with the Company's results and our progress towards recognizing revenue from our newly formed image display group." Further Mr. Hu stated, "We have great confidence in our dual pronged image Capture/Display stratagem and believe we are entering the Display industry at the right time."

Calendar Year 2004, Q3 highlights:

* Syscan Inc. exhibited at the Frontline Solutions Exhibition in Chicago
(USA) and attended the Graphica Exhibition in Germany.
* At these venues, we conducted a pre-launch of two new scanning products
(Q1-2005) and four new flat-panel display products (Q4-2004).
* All of these new products were well received by our key channel
partners in both the North American and European markets.
* Net revenues increased to $1,954,684 from $1,729,405 during the third
quarter of 2003.
* Gross profit increased to 33.3% of net revenues from 30.8% during the
third quarter of 2003.

About Syscan Imaging, Inc.


Headquartered in San Jose, California with additional offices in the Netherlands and Hong Kong, Syscan Imaging, Inc. designs and manufactures imaging technology solutions. Currently the Company ships proprietary mobile image-scanning products to customers throughout the United States, Canada, Europe, South America, Australia and Asia. The Company has been granted 21 patents related to imaging technology with an additional 13 patents under review. Syscan Imaging, Inc.'s common stock is publicly traded on the OTC Bulletin Board under the symbol SYII.

All trademarks and copyrights contained herein are the property of their respective holders.

Note on Forward-Looking Statements

Statements contained in this press release, which are not historical facts, are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based largely on current expectations and are subject to a number of known and unknown risks, uncertainties and other factors beyond our control that could cause actual events and results to differ materially from these statements. These statements are not guarantees of future performance, and readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Syscan undertakes no obligation to update publicly any forward-looking statements.


Source: Syscan Imaging, Inc.

CONTACT: David P. Clark of Syscan Imaging, Inc., +1-561-835-4069,
dclark@syscaninc.com


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