Workstream Inc. Announces Third Quarter Fiscal 2002 Results 4-2002

Ottawa, CANADA Workstream Inc. (NASDAQ ñ WSTM) -- a leading provider of Human Capital Management (HCM) Web-enabled solutions and professional services, today reported its financial results for the three months ended February 28, 2002. All figures are in U.S. dollars.

Revenue for the third quarter of fiscal 2002 increased to $4,332,903, compared with $485,272 for the same quarter last year. Gross profit for the quarter was $3,537,239, an increase of $3,356,094 over the $181,145 reported for the same period last year. Increases in revenue and gross profit were primarily due to recent acquisitions and the expansion of the Company's Career Transition Services. As a result of integration of these acquisitions into the Company's financial results, the Company has experienced improvement in the cost of delivery of its services. On an EBITDA basis, the loss for the period was $395,809, or $0.03 per share compared with a loss of $1,292,971, or $0.17 per share for the same period last year. The net loss was $1,097,740, or $0.08 per share. This compares with a net loss of $1,389,709 or $0.18 per share, for the quarter ended February 28, 2001.

Revenue for the first nine months of fiscal 2002 was $10,574,025, compared with $1,559,166 for the same period last year. Net loss for the first nine months of fiscal 2002 was $2,781,667, compared with a loss of $3,923,139 for the nine-month period ended February 28, 2001.

Pro-forma revenues for the nine months ended February 28, 2002 would have been $14,335,899, compared to $14,138,805 for the same period last year. The pro-forma revenues assume that all acquisitions were completed for the full reporting periods.

Our third quarter of 2002 was an extremely active period for us. While much of the industry felt the impact of a slowing economy, we were successful in winning 12 new software clients which fuelled our sales growth, with 80% of new sales coming from our US sales division, said Michael Mullarkey, CEO, Workstream Inc. We are executing well on our growth strategy and are very pleased to achieve revenue growth and cost savings in an otherwise slow and uncertain economic environment.

Q3 Highlights:

*Released RezKeeper 4.4, a newly enhanced version of the Company's award winning applicant tracking system for independent recruiters and agencies;

*Released E-Cruiter 4.4, a powerful solution for Corporate HR Recruiting Solutions. The system significantly improves the efficiency of hiring-related tasks by eliminating paperwork and data processing, which enables HR professionals to focus on strategic management instead of tactical or administrative tasks; and

*Signed the following notable new clients for Workstream Recruiting Systems: ACNeilson (USA), Ball Corporation (USA), CGI (North America), The Dial Corporation (USA), Execu Search (USA), Info Technologies (USA), Isis Technologies (USA), NDC Health (USA), Oxford Health Plans, Inc. (USA), University Health Network (Canada) and Zenon (USA).

These new client wins continue to prove the value of our Workstream Recruiting Systems and are particularly encouraging during a period where many suppliers lost ground. We believe that our growing client portfolio from both the corporate and agency sectors serves as a powerful endorsement to other potential clients. We continue to enhance our product and service offerings and work to add additional value, stated Art Halloran, President & COO, Workstream.