Dallas, Texas, (October 26, 2000) � Viewcast, Inc. (Nasdaq: VCST), a leading provider of Internet and networked video solutions, today reported record financial results for its third quarter ended September 30, 2000.

Revenues for the quarter were $3.5 million, up 48% sequentially from $2.4 million reported for the June quarter and a substantial increase from $1.0 million reported for the quarter ending September 1999. The company�s growing revenue trend is attributable primarily to increased market interest in the company�s capabilities as well as improved sales execution. This increase was noted in both the Osprey� subsystems and the turnkey systems business.

Net loss for the third quarter was $2.1 million, improving from a net loss of $2.4 million reported in the previous quarter and the $2.6 million reported in the quarter ended September 30, 1999. Basic and diluted net loss per share for the third quarter was $0.14, improved from $0.17 reported for the June quarter and $0.21 recorded in the year ago period.

We are quite pleased with the company�s continued growth and improved financial results,� said George C. Platt, Viewcast�s president and CEO. �The company is working very hard to deliver the quarterly revenue growth necessary to ensure the company�s future profitability. During this quarter our refined reseller program began to fulfill our performance expectations. We have experienced a ramp in system sales and continue to see rising demand for our products across all of our served markets. The new subsystem (Osprey) products are gaining traction and our professional services are also drawing customer attention. The company has improved substantially its financial performance from a year ago, but regardless of this progress, we must maintain this upward trend to realize our full potential. We remain dedicated to our goals for improving revenue results, driving toward profitability and enhancing shareholder value.

The company�s cash and cash equivalents as of September 30, 2000 decreased from the prior quarter to $5.6 million. Total assets were $15.5 million and working capital was approximately $7.6 million. Besides sales, the major source of cash during the third quarter included proceeds of $0.1 million from the exercise of options and warrants.

Subsequent to the quarter ended September 30, 2000, an additional $500,000 of the company�s 7% senior convertible debentures due 2004 were converted. The convertible debentures were issued in April 2000 and raised gross proceeds of $4.45 million for ViewCast. The debentures were converted at an early conversion price of $4.50 per share and resulted in the issuance of 111,111 common shares. The company previously had $3,000,000 of the debentures convert during the third quarter. Additionally, the company�s line of credit from a shareholder, which was due October 22, 2000, has been extended for a year to October 22, 2001 with an option to extend an additional year to October 22, 2002 under certain circumstances.

The company will hold a conference call today, October 26, at 5:00 p.m. EDT. ViewCast�s management team will discuss the quarter�s results, the general business outlook and trends going forward. To participate in the call, dial (212) 346-6523 (reservation #16500831).

Investors can listen to the conference call over the Internet through Vcall at www.vcall.com. For those who cannot listen to the live broadcast, a replay will be available shortly after the call at www.vcall.com. In addition, a playback of the call will be available by phone. The replay can be accessed by calling (800) 633-8284 (reference reservation #16500831). International callers should call (619) 812-6440.

Business Outlook

The following statements are forward-looking in nature and are subject to risks and uncertainties. These statements are based on current expectations, and are the company's targets, not predictions of actual performance. The company's performance has deviated, often materially, from its targets as of the beginning of a quarter. The company will not update these targets during the quarter or comment on its progress in the quarter to analysts or investors until after it has closed its books on the quarter. Any statements by persons outside the company speculating on the progress of the quarter will not be based on internal company information and should be assessed accordingly by investors.

• The company expects fourth quarter revenues to increase primarily driven by increasing subsystems (Osprey) sales. Looking ahead to the first two quarters of 2001, the company anticipates revenues to continue to grow fueled primarily through shipments of the new Osprey� 2000 card and additional system revenues as a result of the company�s increased sales and marketing activities in prior quarters.

• The company anticipates gross margins will average in the low 50% range for next quarter and the first two quarters of 2001, moving slightly lower at the end of fiscal 2001 as revenues balance between system and subsystem business.

• The company expects that operating expenses in the December quarter will be slightly higher from the September quarter and is forecasting modest increases during fiscal 2001. The increases will be related to sales and marketing activities, expansion of manufacturing facilities and additional product research and development activity associated with the company�s increasing revenues and extension of products and services.

About Viewcast

Viewcast enables video communication over the Internet and corporate networks through its components, systems, and turnkey solution products. The company is known as a leading global provider of enterprise-wide, digital video communications solutions for both real-time and on-demand applications. Osprey� video capture cards and codecs, ViewCast� Streaming Video Solutions and Viewpoint VBX System� products deliver a wide array of video solutions for both analog and digital video communication systems. Viewcast has the ability to deliver cutting-edge networked video solutions while delivering systems to transition legacy video communication equipment. ViewCast products are available either directly from the company, or from leading OEMs, system integrators, leading resellers and application developers worldwide. 

Visit the company�s  Web site (http://www.viewcast.com) for more information.

Safe Harbor Statement

The statements made by George Platt and the statements made regarding business outlook contain �forward-looking� information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which reflect the Company�s current judgment on certain issues. Because such statements apply to future events, they are subject to risks and uncertainties that could cause the actual results to differ materially. Potential risks and uncertainties include, without limitation, the growth rate of the markets into which the Company sells its products; market acceptance of and demand for the products of the Company and those of the Company�s customers; unanticipated delays or problems in the introduction of the Company�s products or its customers products and additional expenses associated with sales and marketing activities, research and development costs and manufacturing facility expansion. For more information regarding important factors, which could cause actual results to differ materially, please refer to the Company�s reports on file with the Securities and Exchange Commission including Form 10-KSB and 10-Q.