New Delhi:

Sales for the quarter ended 31 March 2003 were $47.0 million representing a 2.1-per cent increase from the quarter ended 31 March 2002 and sequential increase of 6.7 per cent over the first quarter ended 31 December 31, 2002.

Adjusted net income in the current quarter increased to $5.9 million from $5.7 million in the second quarter of last year. Adjusted diluted earnings per share (based on adjusted net income) for this quarter was $0.33 compared to $0.31 for the corresponding period last year.

Expenses for the current quarter, excluding amortisation of intangibles and in-process research and development expense, increased to $34.0 million compared to $33.1 million for the second quarter of the previous fiscal year.

The second quarter of fiscal 2003 reported a net income of $1.8 million compared to a net income of $4.7 million for the second quarter of last year. This change is largely due to recording previously unrecognised investment tax credits in the second quarter of the prior year. The diluted earnings per share of $0.10 in the current quarter compares to a diluted earnings per share of $0.25 for the second quarter of last year.

Sales for the six months ended 31 March 2003 were $91.1 million, an increase of 1.0 per cent over the previous year. Expenses, excluding amortisation of intangibles, in-process research and development expense, and restructuring and other charges, increased by 1.5 per cent to $66.5 million for the first six months of fiscal 2003 compared to the prior year.

Net income for the current six month period was $3.8 million for diluted earnings per share of $0.21, compared to a net loss of $1.0 million and diluted loss per share of $0.06 last year. Adjusted net income for the current six months was $11.0 million compared to $10.6 million for the six months ended 31 March 2002. Adjusted diluted earnings per share for the current six months, based on adjusted net income, was $0.61 compared to $0.58 for the prior year.

Total assets as on 31 March 2003 were $352.1 million, compared to $348.8 million as on 31 December 2002. The company's cash position, including short-term investments, was $110.2 million as on 31 March 2003 after the acquisitions of LegalKEY and Dispro/Key Automation and the repurchase of 375,800 shares of the company at a cost of $6.8 million during the quarter. Cash flow from operations for the current quarter was $10.3 million. The deferred revenue was significantly higher at $48.1 million, up from $43.2 million as at 31 December 2002.

In accordance with Canadian generally accepted accounting principles, the company reported a net income of $2.5 million and diluted earnings per share of $0.14 for the quarter ended 31 March 2003 compared to a net income of $3.7 million and diluted earnings per share of $0.20 for the same period last year. For the current six month period, the company reported net income of $3.2 million and diluted earnings per share of $0.18, compared to a net loss of $2.8 million and diluted loss per share of $0.15 for the first six months of fiscal 2002.

"I am very happy with the results of the second quarter," says Fred Sorkin, Hummingbird chairman and CEO. "Our strategy continues to focus on maximising revenue from our installed base of customers and to strengthen our market leadership in our core markets. During the quarter, we have taken steps to consolidate our market leadership within the legal and government segments through the LegalKEY and Dispro/Key Automation acquisitions. These acquisitions augment our capabilities and enable us to deliver value added revenue from these important markets. We are confident that the investments we are making are providing the foundation for sustained and accelerated growth."

The company has made significant advancements in its overall product positioning for Hummingbird Enterprise. The recently published Gartner Magic Quadrant for Smart Enterprise Suite recognises Hummingbird as a visionary and acknowledges that "Hummingbird has, for some time offered a broad range of capabilities representative of Smart Enterprise Suite."

The company's positioning anticipated the convergence of knowledge enabling technologies resulting in first mover advantage in the emerging Smart Enterprise Suite market. These investments are designed to deliver lower cost of total ownership for enterprise content management solutions. As an integral element of its positioning, the company continues to see accelerated demand for integrated records management applications.

The company was first to market with a fully integrated document and records management product. At the recently held AIIM conference the company was awarded with the prestigious 2003 AIIM Best of Show award for the category of records management.

The company's successes in the quarter included sales of Hummingbird Enterprise suite to major organisations such as US Air Force, Avaya, Inco, State of Minnesota Attorney General, Inter-American Development Bank, Gucci, Gianni Origoni, Piaggio, France Television, Ciba, Metropolitan Life Insurance.