PEABODY, Mass., - February 13, 2001 - ScanSoft, Inc. (Nasdaq: SSFT), a leading provider of paper-to-digital solutions for desktop, network and corporate workgroups, today announced financial results for the fourth quarter and the full year ended December 31, 2000. ScanSoft's total revenues for the fourth quarter of 2000 increased 62% to $14.0 million, compared to revenues of $8.6 million in the same period of 1999. Year-over-year revenue growth for the fourth quarter was fueled by growth in Europe and higher worldwide OEM activity benefiting from a broader product portfolio. ScanSoft reported net income before amortization of intangible assets of $0.4 million, or $0.01 per diluted share, compared to net income of $0.6 million or $0.02 per diluted share, for the fourth quarter of 1999. After including the effect of the amortization item, ScanSoft reported a net loss of $6.2 million, or $0.13 per diluted share, compared to a net loss of $19 thousand, or $0.00 per diluted share for the fourth quarter of 1999. Comments on the Fourth Quarter "Sequential revenue growth over the third quarter resulted from the successful introduction of PaperPort in Europe, higher OEM revenues from new accounts including our OmniForm agreement with Hewlett-Packard and growth in our corporate licensing efforts," said Richard Palmer, chief financial officer of ScanSoft. "We are pleased that the Company was able to increase revenue and operating profits over the third quarter despite a slowdown in PC and scanner sales in North America. Expenses continued to decline reflecting the full benefit of the cost reduction actions implemented earlier in the year." Full year 2000 Results For the full year 2000, total revenues increased 55% to $49.1 million compared to revenues of $31.6 million in 1999. ScanSoft reported a net operating loss (before acquired in-process R&D, amortization of intangible assets, restructuring and other charges, and unusual items) of $7.6 million, or $0.18 per diluted share, compared to net income of $2.6 million, or $0.08 per diluted share, a year ago. Including the effects of acquired in-process R&D, amortization of intangible assets, restructuring and other unusual charges, the Company reported a net loss of $53.3 million, or $1.26 per diluted share, for the full year 2000, compared to a net loss of $2.7 million, or $0.11 per diluted share, a year ago.