Sirit Technologies (fka SRTTF)

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Sirit Inc. Announces Results For Third Quarter

TORONTO, ONTARIO--(CCNMatthews - Nov. 4, 2004) -

SCM revenue growth continues; Investments in operations position Company for further growth

SIRIT Inc. (TSX:SI), a leading provider of radio frequency identification (RFID) hardware technology, today reported its financial results for the third quarter and nine months ended September 30, 2004. All amounts are noted in Canadian Dollars.

Q3 2004 Highlights

- Total revenue of $5.2 million, an increase of 13.8% from the same period in 2003

- Increasing mix of SCM product sales results in gross margin 43.3%

- Operating loss and net loss for the quarter of ($0.6 million), which includes a $0.4 million foreign exchange loss due to the strengthening of the Canadian dollar during the period

- Shipments began of ST 200 dual OEM reader module; secured $12.0 million order which will begin shipping January 2005 over 3 years; AVIDWireless adopted ST 200 reader module for integration in their AVIDirector; Data Ltd Inc. announced integration of ST 200 into three new mobile solutions

William Staudt, President and CEO, SIRIT Inc. commented, "Following a successful first half of the year, SIRIT continues to deliver solid revenue results. Consistent with our stated strategy, we have made significant investments in our development and sales teams which will position us to meet the increasing demands for our technology worldwide. These investments, combined with encouraging sales of our LF, HF and UHF offerings to our OEM and integrator customers, have resulted in SIRIT products being positioned in a significant number of RFID pilots, tests and trials."

For the third quarter ended September 30, 2004, SIRIT reported revenue of $5.2 million, which represents a 13.8% growth over the third quarter in the previous year. Gross margin for the quarter was 43.3%, up slightly from 41.2% for the second quarter in 2004 and up significantly from 36.4% for the same quarter in 2003.

Expenses in the third quarter increased as a result of investments made by the Company in research and development, sales and marketing as well as the impact from foreign exchange fluctuations. As a result, the Company recorded both an operating and net loss of ($0.6 million) or ($0.01) per share in the third quarter of 2003. This is compared to an
operating loss of ($0.2 million) and net loss of ($1.5 million) or ($0.03) per share in the previous year. The Company intends to make further investments in research and development, sale and marketing to complete its global team of professionals to capitalize on opportunities for growth in Supply Chain Management and other RFID markets.

Revenue for the nine months ended September 30, 2004 totaled $15.6 million, a 15.4% increase over revenue of $13.5 million for the same period in the prior year.

The 88% increase in Supply Chain Management revenue for the nine months ended September 30, 2004 as compared to September 30, 2003 is a result of marketing efforts throughout the first nine months of 2004 which have begun to translate into sales. Revenue from the Company's Automatic Vehicle Identification business was up approximately 8% over the prior year as the Company witnessed inherent growth in Toll Solutions sales from its well established customer base.

The Company had net income from continuing operations for the nine months ended September 30, 2004 of $1.8 million or $0.02 per share, compared with a net loss from continuing operations of ($2.9 million) or ($0.06) per share for the same period in 2003.

As of September 30, 2004, cash and cash equivalents totaled $10.3 million excluding a bid bond deposit of $0.8 million which was returned to the Company on October 5, 2004, resulting in cash on that date of approximately $11.1 million compared to the cash position of $11.3 million at the end of June 30, 2004. The Company's working capital position was $11.9 million at September 30, 2004 as compared to $12.1
million at June 30, 2004.

Conference Call & Webcast

SIRIT will host a conference call to discuss the quarterly results on Thursday, November 4, 2004 at 10:00 am EDT. The conference call will be Webcast over the Internet and accessible at www.sirit.com and www.financialdisclosure.ca.