March Networks Announces Preliminary Fourth Quarter and Fiscal 2008 Results and 2009 Outlook

OTTAWA, May 26 /PRNewswire-FirstCall/ -- March Networks(TM) (TSX:MN; AIM:MNW), a leading provider of innovative video and data applications used for security surveillance, monitoring, analysis and business optimization, today announced preliminary financial results for the fourth quarter and fiscal year ended April 30, 2008. All figures in Canadian dollars and in accordance with Canadian GAAP unless otherwise specified.

The Company expects to record fourth quarter fiscal 2008 revenue of approximately $21 million which results in expected annual revenue of approximately $94 million for fiscal 2008 which is within the Company's guidance of $94 million to $103 million.

The Company's loss from continuing operations before income taxes for the fourth quarter of fiscal 2008 is expected to be approximately $4 million which results in an expected pre-tax loss of approximately $7 million for fiscal 2008. The Company's pre-tax loss for fiscal 2008 is expected to exceed the Company's guidance range of $3 million to $5 million due primarily to lower than expected fourth quarter revenue and higher than expected costs.

Business Outlook

The Company's revenue expectations for the fiscal year ending April 30, 2009 are in the range of $100 million to $115 million.

The Company's expectations of operating earnings for fiscal 2009 are in the range of $0.5 million to $5 million. Operating earnings is a non-GAAP measure that the Company uses to evaluate its performance in order to emphasize cash flow impacting operating activities. The Company defines this measure as earnings before interest, taxes, amortization of acquired intangibles and stock based compensation expense. The Company's expectations of operating earnings for fiscal 2009 compare to preliminary results for fiscal 2008 which indicate a loss of approximately $7 million. This measure may not be comparable to similar measures used by other companies.

"We expect 2009 to be an exciting year for the Company with a return to profitability, an industry leading product line and strong international growth" said Peter Strom, President and Chief Executive Officer.

The Company will release its fourth quarter and fiscal year 2008 financial results on June 11, 2008 and will discuss the results on a conference call and webcast on June 12, 2008 at 8:30 a.m. EDT (1:30 p.m. BST). The conference call may be accessed by dialing 1-800-732-0232 (North America) or 00 800 2288 3501 (Europe).

The conference call webcast can be accessed at http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=2284920

A replay of the conference call will be available from June 12 at 10:30 a.m. EDT until June 19, 2008 at 11:59 p.m. EDT. The replay can be accessed at 1-877-289-8525 or 416-640-1917. The passcode for the replay is 21271057#

About March Networks

March Networks(TM) (TSX:MN; AIM:MNW) is a leading provider of intelligent IP video and business analysis applications that enable organizations to reduce losses, mitigate risks and improve security and operational efficiency. The Company's advanced software suite includes enterprise-class video management, powerful analytics and comprehensive managed and professional services. Our software and systems are used by leading financial institutions, retailers, transportation authorities and other organizations in more than 50 countries. For more information, please visit www.marchnetworks.com.

Forward-Looking Statements

Certain statements included in this release constitute forward-looking statements, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend" and similar expressions to the extent they relate to the Company or its management. The forward-looking statements are not historical facts but reflect the Company's current assumptions and expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current assumptions and expectations.

Assumptions made in preparing the forward-looking statements and financial guidance contained in this release include, but are not limited to, the following:

- The market for the Company's products will grow by greater than 10%
annually.
- The Company will not have any end user customers representing greater
than 10% of revenue in fiscal 2009.
- The Company will develop and deliver new products on time in order to
satisfy the demands of current and potential customers.
- The Company will have adequate component supply to meet customer
demand.
- The Company's gross margin as a percentage of revenue in fiscal 2009
will improve relative to fiscal 2008.
- The Company will lower its operating cost structure relative to fiscal
2008.
- The prevailing exchange rate for US dollars and Euros to Canadian
dollars will be US$1.00=CDN$1.00 and Euro 1=CDN
$1.50.
- The Company will continue to demonstrate its potential to generate
sufficient profits in future fiscal years to realize the value of its
future tax assets.

Factors that could cause actual results to differ materially from expected results include, but are not limited to, the following:

- Higher than targeted product costs and/or higher than expected declines
in market pricing for new products.
- Increasing competition from larger entities resulting from the
consolidation of competitors and from larger entrants from other
industries.
- Delays in product development programs for new products and new product
features which lead to cost overruns and /or missed customer
opportunities.
- Weaker than expected success versus competitors in new customer
opportunities and/or loss of existing customers to competitors.
- Product issues in the Company's installed base that result in increased
costs to the Company and/or lost revenue opportunities.
- Difficulties integrating acquired business operations and related
diversion of management attention.
- Revenue shortfalls due to delays in securing new customer opportunities
and the lack of long term purchase commitments from customers.
- Shortages or long lead times in component supply that affect the
Company's ability to meet customer demand.
- Revenue declines associated with weakness in the US economy.

Additional risks are discussed herein and under "Risk Factors" in the Company's Annual Information Form available online at www.sedar.com.

(x)MARCH NETWORKS and the MARCH NETWORKS logo are trademarks of March
Networks Corporation. All other trademarks are the property of their
respective owners.

Source: MARCH NETWORKS CORPORATION

CONTACT: Peter Wilenius, VP Corporate Development, March Networks
Corporation, (613) 591-8181, pwilenius@marchnetworks.com

2008-05-26 20:32:21 0370124 PRNEWSWIRE