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ViewCast Corporation Announces First Quarter 2006 Financial Results Video System and Software Sales Up 50 Percent; Net Sales Increase 13 Percent PLANO, Texas - May 15, 2006 - ViewCast Corporation (OTCBB:VCST), a leading global provider of high-quality audio and video communication products, today reported financial results for the first quarter ended March 31, 2006. First Quarter Financial Results Total revenues from continuing operations for the first quarter of 2006 were $2.9 million, an increase of 13 percent over the $2.6 million reported in the first quarter of 2005 due to sales growth of systems and capture cards. "Niagara� encoding system sales and Osprey� Video capture card sales continue to accelerate," said George Platt, chief executive officer of ViewCast Corporation. "During the first quarter, revenue from Niagara systems and third-party software product sales was up more than 50 percent compared to the same quarter in 2005. Osprey sales also increased. Demand is strong, and we expect this trend to continue particularly with the increased demand of video content for the internet and mobile communication markets." Total operating expenses from continuing operations for the first quarter of 2006 were $2.2 million, a 5 percent increase from the $2.0 million reported in the first quarter of 2005. The net loss from continuing and discontinued operations for the first quarter of 2006 was $860,573 compared to a loss of $1.2 million in the comparable 2005 quarter. The net loss per share for the first quarter of 2006 was ($0.04) per share, compared to ($0.06) per share, in the same quarter of 2005. First quarter EBITDA (earnings before interest, taxes, depreciation, amortization and other income/expense items) loss was $557,305, compared with the EDITDA of $313,049 reported in the first quarter of 2005. The company considers EDITDA to be an important measure of performance because it reflects one of the capital resources available to the company's operations that may be used to evaluate the actual performance of the company. Business Highlights Public Warrant Expiration Date Extended On January 24, 2006 the ViewCast board of directors voted to extend the expiration date on the public and public equivalent common stock purchase warrants from the current expiration date of February 3, 2006. The new expiration date on these warrants will be February 3, 2007. In addition, the exercise price of these warrants was reduced to $0.275 per share from $1.00 per share beginning on March 1, 2006, until the warrant expiration date. The warrants are redeemable by the company under certain conditions. As of December 31, 2005, approximately 3,900,000 public and public equivalent warrants were outstanding. The additional capital made available through the extension of these warrants will be invested to expand the company's business. New Product Announcement On April 20, 2006, the company announced the introduction of Niagara� GoStream and NiagaraSCX 5.0 that management expects to begin shipping before the end of the second quarter of 2006. The Niagara GoStream encoder is a special offering in the market, focusing on the creation and presentation of video and audio on the Internet with a single-button operation. It features EZStream� event buttons that allow users to load pre-defined encoding profiles for a specific event and simply press the record button to begin a streaming session. In addition, GoStream simplifies the user experience by introducing the EASE(TM) control menu. The EASE menu is a workflow menu that streamlines the user experience and even allows a user to export video content to video storage devices including the Apple Video iPod� and Creative Zen Vision� media portable media players. NiagaraSCX� 5.0 is the latest version of ViewCast's remote control and monitoring software application for Osprey�-based encoders. NiagaraSCX 5.0 software incorporates digital rights management (DRM) for Windows Media�, MPEG-4 /H.264 and MPEG-2 encoding standards. The software will be bundled with the company's Niagara encoding systems.
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