Mason Olds, Sr. Vice President and General Manager of the Imaging Systems Group of Canon Canada Inc. said: "Print doesn't operate in a vacuum -- it's increasingly likely to be part of a cross-media marketing campaign. As printers across Canada make the transition to marketing service providers, we welcome the addition of Pageflex Persona to the burgeoning Canon Workflow Program. It gives imagePRESS users the ability to offer integrated marketing campaigns and secure new revenue opportunities for their business."

Bitstream's CEO, Anna Chagnon commented on the partnership by stating: "We are delighted to now extend to extend our relationship within Canon by adding Canon Canada to our growing list of resellers. Our ongoing partnership brings together the best in personalization and cross media technology with the exceptional image quality of the Canon imagePRESS products. Together, Pageflex and Canon Canada give customers a way to grow from being a print specialist into a multi-media communications provider."

About Pageflex

Pageflex offers unparalleled design control with powerful graphic design features created specifically for variable publishing. The platform produces rich, creative, award-winning document designs that look like they were given the individual attention of a graphic designer but were, in reality, created on-the-fly with Pageflex variable publishing technology.

About Bitstream

Bitstream Inc. (NASDAQ: BITS) is a software development company focused on bringing unique software products to a wide variety of markets. The company's core software products include award-winning fonts and font rendering software, mobile browsing and messaging software and variable data publishing and Web-to-print software for personalized marketing. For more information about Bitstream please visit www.bitstream.com.

About Canon Canada Inc.

Headquartered in Mississauga, Ontario, the company employs 1,400 people at its offices nation-wide, servicing the Canadian market from coast to coast. Innovation and cutting-edge technology have been essential ingredients in Canon's success. Canon's leadership in imaging, optical and document management technology and solutions is based in large part on the thousands of patents the company has secured throughout its history. For the 16th consecutive year, Canon Inc. is among the top three US patent recipients.

The company's comprehensive product line includes networked multifunction devices; digital copiers (colour and black and white); printers, scanners, image filing systems and facsimile machines; calculators, digital camcorders, digital and analogue cameras and lenses; semiconductor, broadcast and other specialized industrial products.

Canon supports programs that help preserve and protect the environment. The company instituted the Clean Earth Campaign in 1990, which assists various environmental and recycling initiatives. The Campaign has also supported leading environmental organizations, such as World Wildlife Fund - Canada and the Canon Envirothon.

For more information, visitwww.canon.ca

Bitstream, Pageflex and MyFonts.com are registered trademarks or service marks, and the Pageflex logo, the Bitstream logo and ThunderHawk are trademarks, of the Company. Other technologies and brand names are used for information only and remain trademarks or registered trademarks of their respective companies.

SOURCE: Pageflex

Bitstream Inc. 
Marion Williams-Bennett, 617-520-8311 
mbennett@bitstream.com 
or 
Canon Canada Inc. 
Wayne Doyle, 905-565-4598 
Senior Manager, Corporate Communications 
wdoyle@canada.canon.com

GAAP Results

Our income from operations decreased $568,000 or 78% to $163,000 for the three months ended September 30, 2008 as compared to $731,000 for the three months ended September 30, 2007. Our net income decreased $689,000 or 79% to $187,000 or $0.02 per diluted share for the three months ended September 30, 2008 as compared to net income of $876,000 or $0.08 per diluted share for the three months ended September 30, 2007.

Non-GAAP Results

Our income from operations, not including the effect of stock-based compensation expense, decreased $539,000 or 60% to $360,000 for the three months ended September 30, 2008 as compared to $899,000 for the three months ended September 30, 2007. Net income, not including the effect of stock-based compensation expense, decreased $660,000 or 63% to $384,000 or $0.04 per diluted share for the three months ended September 30, 2008 as compared to $1,044,000 or $0.10 per diluted share for the three months ended September 30, 2007.

A reconciliation between GAAP and non-GAAP results is provided at the end of this press release.

CONFERENCE CALL REMINDER

Today, November 12, 2008, at 4:30 p.m. EST, Bitstream will host a conference call with the financial community to discuss its results for the quarter ended September 30, 2008:

-- Domestic Dial-in number: 1-866-219-5885

-- International Dial-in number: 1-703-639-1124

Call into the conference number 5-10 minutes prior to the start time. An operator will request that you provide your name and organization and ask you to wait until the call begins. If you have any difficulty connecting with the conference call number, please contact at Bitstream: (617) 497-6222.

A replay of the conference call will be available through November 22, 2008 (access code): 1303925

-- Domestic Replay number: 1-888-266-2081

-- International Replay number: 1-703-925-2533

Forward Looking Statements Disclosure

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current expectations. Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, including, without limitation, market acceptance of the Company's products, competition and the timely introduction of new products. Additional information concerning certain risks and uncertainties that would cause actual results to differ materially from those projected or suggested in the forward-looking statements is contained in the Company's filings with the Securities and Exchange Commission, including Bitstream's Annual Report on Form 10-K for the year ended December 31, 2007.

About Bitstream

Bitstream Inc. (NASDAQ: BITS) is a software development company that makes communications compelling. Bitstream enables customers worldwide to render high-quality text, browse the Web on wireless devices, select from the largest collection of fonts online, and customize documents over the Internet. Its core competencies include fonts and font technology, browsing technology, and publishing technology. For more information about Bitstream please visit www.bitstream.com.

Bitstream and MyFonts.com are registered trademarks, and Pageflex, the Bitstream logo and ThunderHawk are trademarks, of the Company. Other technologies and brand names are used for information only and remain trademarks or registered trademarks of their respective companies.

Bitstream Inc.
Consolidated Statements of Operations
(In Thousands, Except Per Share Data)
(unaudited)
                                                  Three Months Ended                    Nine Months Ended
                                                  September 30,                         September 30,
                                                  2008                2007              2008                2007
Revenue:
Software license                             $    4,222         $     4,699        $    14,563        $     14,189
Services                                          1,261               1,108             3,807               3,146
Total revenue                                     5,483               5,807             18,370              17,335
Cost of revenue:
Software license                                  1,696               1,779             5,555               5,190
Services                                          598                 434               1,782               1,410
Total cost of revenue                             2,294               2,213             7,337               6,600
Gross profit                                      3,189               3,594             11,033              10,735
Operating expenses:
Marketing and selling                             979                 974               3,358               2,937
Research and development                          1,334               1,223             4,048               3,514
General and administrative                        713                 666               2,072               1,870
Total operating expenses                          3,026               2,863             9,478               8,321
Operating income                                  163                 731               1,555               2,414
Interest income, net                              30                  156               160                 424
Total other income and expense                    30                  156               160                 424
Income before provision for income taxes          193                 887               1,715               2,838
Provision for income taxes                        6                   11                56                  21
Net income                                   $    187           $     876          $    1,659         $     2,817
Basic net earnings per share                 $    0.02          $     0.09         $    0.17          $     0.29
Diluted net earnings per share               $    0.02          $     0.08         $    0.16          $     0.26
Basic weighted average shares outstanding         9,521               10,036            9,621               9,756
Diluted weighted average shares outstanding       10,160              10,963            10,332              10,992

Bitstream Inc.
Consolidated Balance Sheets
(In Thousands)
(unaudited)
ASSETS                                        September 30,         December 31,
                                              2008                  2007
Current assets:
Cash and cash equivalents                     $       15,200        $       16,420
Accounts receivable, net                              1,844                 2,245
Prepaid expenses and other current assets             618                   465
Total current assets                                  17,662                19,130
Property and equipment, net                           475                   569
Other assets:
Restricted cash                                       150                   150
Goodwill                                              727                   727
Intangible assets                                     71                    67
Total other assets                                    948                   944
Total assets                                  $       19,085        $       20,643
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                              $       1,061         $       1,137
Accrued expenses                                      1,599                 1,759
Deferred revenue                                      1795                  1,720
Total current liabilities                             4,455                 4,616
Long-term liabilities                                 ---                   40
Total liabilities                                     4,455                 4,656
Total stockholders' equity                            14,630                15,987
Total liabilities and stockholders' equity    $       19,085        $       20,643

Bitstream Inc.
Non-GAAP Results
(In Thousands, Except Per Share Data)
(unaudited)
The following table shows Bitstream's
non-GAAP results reconciled to GAAP results included in this
release.
                                                                 Three Months
                                                                 Ended September 30,
                                                                 2008                                2007
GAAP operating income                                $           163                     $           731
SFAS 123R stock-based compensation                               197                                 168
Non-GAAP operating income                            $           360                     $           899
GAAP net income                                      $           187                     $           876
SFAS 123R stock-based compensation                               197                                 168
Non-GAAP net income                                  $           384                     $           1,044
Diluted net income per share:
GAAP net income                                      $           0.02                    $           0.08
SFAS 123R stock-based compensation                               0.02                                0.02
Non-GAAP net income                                  $           0.04                    $           0.10
Shares used to compute diluted net income per share              10,160                              10,963

SOURCE: Bitstream Inc.

Bitstream Inc. 
Anna Chagnon, 617-520-8619 
President and CEO 
achagnon@bitstream.com

Partner companies scheduled to conduct demonstrations in the Pageflex booth include:

-- Avanti's Graphic Arts Management System from Avanti Systems provides a complete, streamlined workflow from online document customization and ordering in Pageflex Storefront through the print production environment for printing, finishing and shipment.

-- DirectSmile combines image personalization with Pageflex products to add emotions for the web, print, as well as other associated technologies in the personalized imaging space.

-- Enterprise Print Management Solutions (EPMS) communicates production information seamlessly between Pageflex server and the Enterprise 32 print management system.

-- Software Marketing Associates' pro-mail(R) Fulfillment Solution automates fulfillment processes from the shopping cart to pick, pack, and ship for both static and customized items through its integration with Pageflex Storefront.

In addition to the four partners in the Pageflex booth, Pageflex will be highlighting their variable data publishing technology in four major partner booths: Canon, HP and Xerox, and Xeikon.

"In today's challenging economic times, printers are increasingly looking for ways to gain efficiencies. At Pageflex, we strive to provide technology solutions for variable data and web-to-print. Equally important is how these products integrate with existing workflows at customer sites, allowing them to focus less on manual production tasks and more on broadening the scope of their businesses," said Anna Chagnon, president and CEO, Bitstream Inc.

During Graph Expo, Pageflex will be hosting a presentation called "Proving Your Worth: Tracking ROI of Multi-touch Campaigns." This presentation is designed to help printers understand why they need to offering cross media campaigns and the elements included in those types of campaigns. The presentation will be held:

Date: Tuesday, October 28
Time: 12:30 - 1:30 pm
Location: S403ab, South Hall, Level

About Bitstream

Bitstream Inc. (NASDAQ: BITS) is a software development company focused on bringing unique software products to a wide variety of markets. The company's core software products include award-winning fonts and font rendering software, mobile browsing and messaging software and variable data publishing and Web-to-print software for personalized marketing. For more information about Bitstream please visit www.bitstream.com.

Bitstream and MyFonts.com are registered trademarks or service marks, and Pageflex, the Bitstream logo and ThunderHawk are trademarks, of the Company. Other technologies and brand names are used for information only and remain trademarks or registered trademarks of their respective companies.

SOURCE: Pageflex

Bitstream Inc. 
Marion Williams-Bennett, 617-520-8311 
mbennett@bitstream.com

The new programming guide gives Tata Sky subscribers the choice of navigating the four-day TV listings in English or Hindi. Hindi is the national language and one of the most widely read and understood languages in India. Having the Hindi language as an option makes it easier for millions of viewers across the country to plan and organize their TV viewing more effectively.

Mr. Vikram Kaushik, Managing Director and CEO, Tata Sky Ltd. said, "We are happy to partner with Bitstream and use Panorama to introduce this advanced technology that will give subscribers the flexibility to choose the language in which they want to view their daily TV programme listings at the press of a button. The new electronic programming guide reinforces our commitment in building a state-of-the-art direct-to-home operation in India, and we are confident that it will attract viewers from all over India to the Tata Sky platform."

Anna Chagnon, President and CEO of Bitstream, Inc. "We are proud to be part of the great work of Tata Sky and their groundbreaking program guide. This project further demonstrates how Panorama gives our customers a global font solution that enables them to quickly and easily implement international languages and compete in the global marketplace."

About Bitstream

Bitstream Inc. (NASDAQ: BITS) is a software development company focused on bringing unique software products to a wide variety of markets. The company's core software products include award-winning fonts and font rendering software, mobile browsing and messaging software and variable data publishing and Web-to-print software for personalized marketing. For more information about Bitstream please visit www.bitstream.com.

Bitstream and Font Fusion are registered trademarks and the Bitstream logo and Bitstream Panorama are trademarks of Bitstream Inc. Other technologies and brand names are used for information only and remain trademarks or registered trademarks of their respective companies.

SOURCE: Bitstream Inc.

Bitstream Inc. 
Marion Williams-Bennett, 617-520-8311 
mbennett@bitstream.com