Matrikon™ releases results for the third quarter of 2009 and suspends quarterly dividend

Edmonton, Alberta - July 7, 2009

Matrikon Inc. (TSX:MTK), a leading provider of solutions for industrial intelligence, today reported financial results for the third quarter of fiscal year 2009 which ended May 31, 2009.

Matrikon president and CEO Nizar J. Somji commented on the quarter: "We are disappointed with our results this quarter. Several factors impacted our results in the third quarter, including:

• The global economic crisis has led to delays on some projects and a general lengthening of our sales cycle. As a result, product sales were particularly weak in the quarter and utilization, while improved over the second quarter, was still below our target range.
• We continued to make investments in R&D and staffing levels to support the opportunities in our sales pipeline. With the delay of these opportunities, revenue to support the cost structure did not materialize as anticipated.
• The strengthening Canadian dollar relative to other currencies in which we do business resulted in a foreign exchange translation loss of $2.13 million.

Starting late in the quarter and continuing subsequent to the quarter, we began to rationalize our business and review staff levels in each business area. We have made the adjustments needed to bring cost structures into alignment with revenue levels, in many cases redeploying resources to other business areas if at all possible. The net effect is a 5% reduction in staff since May 31, 2009.

On the bright side, we are beginning to see a return to spending in some industries and have received positive indications that some of the opportunities in our pipeline will proceed in the near term."

Third quarter revenue was $16.38 million compared to $20.54 million in Q3-08 and $19.66 million in Q2-09. Matrikon's net loss in the third quarter was $2.96 million or $0.10 per share compared to net income of $2.47 million or $0.08 per share in Q3-08 and $2.03 million or $0.07 per share in Q2-09.

Year-to-date (YTD) revenue was down 7% at $55.62 million compared to the first nine months of FY-08. YTD net income was $1.83 million or $0.06 per share, compared to $6.52 million or $0.21 per share in the first nine months of FY-08.

Given these results, Matrikon's board of directors has suspended the quarterly dividend for the third quarter and will reevaluate next quarter.

Additional Highlights

• Software licenses were $2.72 million in Q3-09, representing a decline of 41% compared to Q3-08 and 42% compared to Q2-09 as a result of the global economic crisis contributing to a longer sales cycle and delayed decisions. YTD software licenses declined by 14% to $11.11 million compared to $12.87 million in FY-08.
• Record support revenue of $2.62 million was achieved in Q3-09, representing growth of 16% compared to Q3-08 and a 5% increase compared to Q2-08. YTD support revenue also grew by 18% to $7.64 million from $6.45 million in FY-08.
• Foreign currency translation losses amounted to $2.13 million in Q3-09 compared to a gain of $0.33 million in Q3-08 as the Canadian dollar strengthened against other currencies in which we transact business. YTD foreign currency translation losses were $0.51 million compared to a YTD loss of $0.46 million in FY-08.
• Q3-09 gross margin was 50%, comprised of 98% gross margin on software license revenue, 87% on support revenue, 32% on consulting revenue and 22% on equipment revenue. YTD gross margin was 57% with a 99% margin on software license revenue, 91% on support revenue, 39% on consulting revenue and 22% on equipment revenue.
• Overhead expenses for Q3-09 were $9.88 million or 60% of revenue. Consulting G&A expenses were up 40% compared to Q3-08 as a result of employee reclassifications based on current roles and reallocations of overhead expenses. Sales and marketing expenses were up 17% from Q3-08, as we continue to invest in sales and marketing and added sales staff to focus on industry vertical solutions. General & administrative expenses were up 11% compared to Q3-08 as a result of a 28% increase in staff, costs related to the joint entity in India, and increased third party consulting fees. YTD overhead expenses were $28.89 million or 52% of revenue compared to $24.17 million or 40% of revenue in the first nine months of FY-08.
• Cash provided by operations was $0.52 million in Q3-09 compared to $1.55 million in Q3-08. YTD cash used in operations was $1.28 million compared to cash generated by operations of $9.89 million for the first nine months of FY-08. Increased accounts receivable, contracts in progress and slower collections in the quarter contributed to the cash decrease.

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

Conference Call and Webcast
Matrikon President and CEO, Nizar J. Somji and CFO Jonathan Chia will hold a conference call to discuss third quarter results on Wednesday, July 8, 2009 at 8:30 am ET (6:30 am MT). To participate live, call 416-644-3414 in the Toronto area and 1-800-732-9307 in all other areas.

A replay will be available until midnight, July 31, 2009. To access the playback service, please dial 416-640-1917 in Toronto or 1-877-289-8525 elsewhere. The reservation number is 21309350 followed by the pound sign (#).

The conference call will also be webcast at:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2713700

For more information, contact:
Nicole Sayler
Corporate Communications Director
780-945-4010
877-628-7456 x 4010
email: nicole.sayler@matrikon.com

Matrikon is a registered trademark of Matrikon Inc.