Amnis Systems Announces Revenue Increases in 2001; Fourth Quarter 2001 Meets Expectations in Difficult 2001 Economic Climate.

Business Editors

PALO ALTO, Calif.--(BUSINESS WIRE)--April 4, 2002

Amnis Systems Inc. (OTCBB:AMNM) (Frankfurt: ANI), a leading global provider of networked streaming video systems, today announced its financial results for the fourth quarter and year ended Dec. 31, 2001.

Total revenues for the year ending Dec. 31, 2001 were approximately $4.1 million, a 15 percent increase compared to $3.6 million in the prior year ending Dec. 31, 2000. Net loss for the year was $5.4 million, or $0.47 per share, which compares to a net loss of $5.4 million, or $0.22 per share in the prior year. Gross margins for the year were 46 percent, up from 33 percent in the prior year. Revenue for the fourth quarter ending Dec. 31, 2001 was $0.659 million an increase of 38 percent compared to $0.477 million in the third quarter of 2001. Net loss for the fourth quarter was $1.2 million a decrease of 27 percent compared to $1.65 million in the third quarter of 2001.

"Amnis was able to deliver solid performance in a very challenging economic environment during 2001," stated Michael Liccardo, chairman, president and CEO of Amnis Systems. "The worldwide economic slowdown and the events of September 11 impacted our results in the second half of 2001. We experienced a modest improvement in orders in our fourth quarter and significantly reduced our operating expenses through tight cost controls. The new customers that we secured during 2001 in both the U.S. and overseas markets continue to validate the long term growth opportunity in the enterprise for our network digital video solutions."

Year 2001 Highlights

Industry recognition and award winning products

During 2001, Amnis won the Editor's Choice Award by "Network Computing" magazine for digital video products. After extensive network testing, Amnis received a solid "A" grade for the award significantly surpassing any other competitor. Amnis was also chosen as a finalist for Networld + Interop's best of show award for its LivePlayer software product. LivePlayer is the industry's first all software MPEG video player allowing playback of live streaming video over IP networks on the desktop for distance learning, video surveillance and video communications applications. These awards further validated Amnis product leadership in broadband network streaming video applications for the enterprise.

Introduction of product enhancements for video surveillance and multimedia applications

In 2001, Amnis introduced new embedded software releases for its NAC3000 and NAC4000 network attached video appliance products with features supporting video surveillance applications. These features allow the easy integration of application specific software and hardware with the Amnis streaming video appliance architecture to create a variety of monitoring, event specific and management functions typically required in remote security and surveillance applications. Amnis also introduced support for the RTP (Real Time Streaming Protocol) in its network video products. This multimedia communications network protocol has become the industry standard in IP based networks and is widely supported by network equipment suppliers such as Cisco and Extreme Networks.

Expansion of customer base and video surveillance applications

In 2001, Amnis added new customers in the video surveillance, satellite communications, distance learning and government markets. Several U.S. Army groups selected Amnis for high quality streaming video projects. A number of video surveillance projects were deployed in government related applications including new business with Northrop Grumman, General Dynamics, Maritime Applied Physics, Raytheon, Boeing and SAIC. Amnis products were also deployed in a major police surveillance project for the City of Suzhou, China and by VIASAT for a satellite video delivery service for corporate customers. In addition, several new distance learning projects were deployed using Amnis high quality network attached video over IP products including the University of Hawaii, Veteran's Administration, Social Security Administration and numerous universities. Amnis also continued to receive repeat business from Hughes Network Systems, Verizon, Pan Dacom, Daimler Chrysler, the U.S. Navy, Army, Air Force, and Coast Guard, Pfizer, Matsushita and Pinnacle Systems.

Formalization of partnership with Extreme Networks

Amnis completed a formal partnership relationship with Extreme Networks as part of their Go Purple Partner Program. The partnership guarantees interoperability of Amnis products with Extreme Networks high performance network switches. Extreme invited Amnis to participate in a variety of national sales meetings and joint marketing initiatives to promote broadband streaming video applications in IP based enterprise networks. Amnis also receives direct access to the Extreme Networks worldwide sales organization, recognition as a preferred supplier, joint customer demonstrations and collaboration on new business opportunities.

Completion of new funding agreement 

During 2001, Amnis received its first stage of new financing with the completion of a financing agreement for up to $2.4 million. The funding is provided by the Bristol Investment Fund and will provide operating capital during 2002.

Looking forward

"We are optimistic that during 2002 enterprise customers will increase their investment in video communications and video surveillance applications. These investments will likely provide Amnis with substantial new revenue opportunities in late 2002 and into 2003," said Liccardo. "However we are cautious in the short term as delayed decision-making late in our sales cycle has postponed several large deals beyond our first quarter 2002. Our revenue for the first quarter is expected to be in the range of $225,000 to $300,000 and in the range of $600,000 to $900,000 for the second quarter of 2002. We received an additional $1.8 million of financing in late February 2002 and begun to rebuild our sales organization in both the U.S. and China markets. Our pipeline of new business opportunities for the remainder of 2002 continues to grow. We are optimistic about our long-term future in spite of the tough short term macro economic environment."

"In the last few weeks we completed a partnership agreement with Hewlett Packard (HP) which will significantly increase the exposure of Amnis products within the HP sales organization," said Liccardo. "The companies are working together through the HP partner alliance program to ensure interoperability of Amnis video solutions with HP server/storage and HP's industry leading Open View network management products. Amnis has already demonstrated its LiveMap network management software running on HP servers at the Intel Developers Forum. The HP and Extreme Network partnerships are already yielding results in identification of new business opportunities for 2002."

About Amnis Systems Inc.

Amnis Systems Inc. (OTCBB:AMNM) which acquired Optivision Inc. in 2001 is the market leader in the networked streaming video market. The company develops, manufactures and delivers MPEG network video products for high-quality video creation, management and distribution worldwide both directly and through leading industry partners. Based in Palo Alto, Amnis products are used in diverse applications such as distance learning, corporate training, video courier services, telemedicine, surveillance and visual collaboration. For more information about Amnis Systems Inc., visit www.amnisinc.com or phone [phone].

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission. Our forward looking statements are based on currently available information which management has assessed but which is dynamic and subject to rapid and even abrupt change due to risks and uncertainties that affect our business, including the unpredictability of future revenues and limited visibility into future demand on which to base our forecasts; the current uncertainty in our marketplace which may impact expected demand, customer selection criteria and sales cycle; our ability to execute on product deliverables and major customer contracts; slower economic growth generally, slower adoption of broadband technology, or cutbacks in information technology spending; and factors beyond our control such as power outages or work stoppages at key customers.