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Cenosis Q1 Results: Restructuring Lowers Sales to $416,376 from $2.8 Million

Press release from the issuing company

November 1 -- LAVAL, QUEBEC--Cenosis Inc. announced today its financial results for the first quarter ended August 31, 2002. Over the course of its 2002 - 2003 first quarter, Cenosis pursued its turnaround and restructuring plan, while maintaining ongoing operations and development of its technology platform. The Company successfully completed a shares for debt repayment plan with a number of creditors and negotiated debt repayment and settlement plans with numerous others. Within the framework of its restructuring plan, the Company recently announced a strategic re-focus on core competencies, a new sales and distribution strategy, a re-deployment of its business units and a renewed commitment to its ASP (Application Service Provider) vocation. The Company also announced in the last few days the signing of commercial agreements with two industry leading players: MCDataweb, a European subsidiary of Mitsubishi Corporation, and Informatel, whose software solutions have been installed at more than 200 sites across North America and are used to produce over 800 newspapers (dailies and weeklies), magazines and trade publications. The Company is actively pursuing financing opportunities to complete its financial turnaround while maintaining the necessary working capital for its ongoing operations. Financial Results For the first quarter ended August 31, 2002, Cenosis posted revenues of $416,376 compared to $2,803,108 for the same period in 2001. Gross margin for the quarter was $178,943, compared to $420,206 for the corresponding period in 2001. These reductions in revenues and gross margin are due to the cessation of unprofitable activities which occured in the last fiscal year. Selling and administrative expenses amounted to $201,519 compared to $1,763,286 for the first quarter 2001. This decrease of $1,561,767 is mainly due to cost cuts relating to discontinued activities as well as to the tight control on expenditures exercised by management since the beginning of the year. During the course of the quarter, the Company wrote off $151,491 creditor debt and reduced its bank loan liabilities by $364,349. These write-offs and repayments allowed the Company to satisfy the requirements imposed by its banking partner and maintain a steady course in its financial and operational turnaround. The loss before taxes and other charges is $52,087 or $0.003 per share for the three months ending August 31, 2002, compared to $1,691,870 or $0.14 per share for the same period in 2001. Net earnings amount to $99,404 or $0.01 per share for the first quarter of the current fiscal year, versus a loss of $4,324,139, or $0.31 per share in the same quarter the preceding year. For the quarter ending August 31, 2002, Cenosis had a breakeven cash flow position, compared to a shortage of $297,162 for the quarter ending August 31, 2001. The Company is currently negotiating with a number of private investors in order to close a series of private placements, in order to complete its restructuring plan previously announced last October 16. About Cenosis Inc. Cenosis Inc. is a high technology company active in the development and integration of software solutions, mainly for the publishing and graphic communications industries. Its wholly owned subsidiary, KangaCom Inc., is an application service provider (ASP) offering software solutions for the transfer of large data files and digital workflow automation.