Special Committee of Independent Directors Continues to Evaluate Strategic Alternatives

Bellevue, Wash. — May 9, 2008 — Captaris, Inc. (NASDAQ: CAPA), a leading provider of software products that automate document-centric processes, today reported financial results for its first quarter ended March 31, 2008.

Total revenue for the quarter was $27.9 million, a 36% increase over the prior year’s first quarter. Revenue by category, compared to the first quarter of 2007 was as follows:

• Software revenue was $8.9 million, an increase of $1.8 million, or 25%
• Maintenance, support and services revenue was $14.4 million, an increase of $5.0 million or 53%
• Hardware revenue was $3.7 million, a decrease of $379,000 or 9%
• Appliance revenue, the FaxPress product line of hardware and embedded software, was $1.0 million

“We transformed our business in the first quarter of 2008,” said David P. Anastasi, President and CEO of Captaris. “The acquisition of CDT, with the expanded international reach and document capture technology it brought to Captaris, marked a major milestone in realizing our strategic vision. In addition, we made several important product announcements and enhanced our customer offerings with our ability to integrate acquired technologies with existing Captaris products.”

“Captaris has a solid set of assets including a large customer base, a worldwide distribution network, a collection of intellectual property rights and a skilled and diverse work force,” continued Mr. Anastasi. “The integration of our acquisitions of Castelle and CDT are on track.

We have also initiated cost reductions and will continue to eliminate redundant headcount and programs. We expect these actions will favorably impact our operating expenses in the second quarter and we will continue to look for additional opportunities to run the business more efficiently”.

Gross profit was $18.2 million, an increase of $3.9 million from the first quarter of 2007; gross margin was 65.1%, compared to 69.5% in the same quarter last year. The decline in the gross margin was due to the inclusion of CDT and Castelle, which have lower gross margins than our legacy business. Technology amortization expense recognized in the first quarter of 2008 related to CDT and Castelle was $634,000.

Total operating expenses for the quarter were $26.9 million, compared to $15.3 million in the prior year’s first quarter. R&D increased $3.2 million, including $2.4 million due to acquisitions and $750,000 for the consolidation and outsourcing of the Company’s software development
activities. Sales and marketing increased $3.9 million, including $3.1 million from the acquisitions and $1.1 million for additional sales resources, primarily in International markets, partially offset by a reduction of $273,000 in marketing. G&A increased $1.7 million, including
$906,000 for the acquisitions and $695,000 associated with the evaluation of strategic alternatives and related shareholder matters. The operating results also include a $1.2 million charge for acquired in-process development expense associated with the acquisition of CDT. In
addition, during the first quarter of 2007 the Company received a final $1.0 million cash payment related to the sale of the CallXpress product line which was recorded as a reduction of operating expenses; no similar payment was received during the first quarter of 2008.

Amortization of intangible assets for the quarter was $1.7 million, including $1.1 million in cost of revenue and $664,000 in operating expenses, compared to $622,000 for the same quarter last year, including $481,000 in cost of revenue and $141,000 in operating expenses. Depreciation was $936,000 in the first quarter of 2008, compared to $726,000 in the first quarter of 2007.

Stock based compensation expense was $396,000 in the first quarter of 2008 compared to $195,000 in the first quarter of 2007. The decrease in other income for the Quarter ended March 31, 2008 compared to the same quarter last year was primarily due to less interest income earned as a result of cash used for the acquisition of CDT. Interest expense included $234,000 for CDT’s pension plan and $184,000 for the credit facility. Included in other income for the quarters ended March 31, 2008
and 2007 were gains on foreign currency translation of $474,000 and $125,000, respectively.

The Company reported a net loss for the first quarter of 2008 of $6.6 million, or $0.25 per basic and diluted share, compared to a net loss of $265,000, or $0.01 per basic and diluted share for the first quarter of 2007.

Cash flow from operations was $836,000 million in the first quarter of 2008, compared to $2.1 million in the same quarter last year.

Consolidated cash, cash equivalents and investment balances as of March 31, 2008 totaled $39.9 million, compared to $47.2 million as of December 31, 2007 and $58.9 million as of March 31, 2007. On January 4, 2008 the Company purchased Captaris Document Technologies
GmbH (“CDT”) (formerly Océ Document Technologies GmbH) for a net cash payment of $17.9 million.

Deferred revenue at March 31, 2008 was $31.5 million compared to $28.7 million at December 31, 2007 and $27.8 million as of March 31, 2007.

Stock Repurchase
During the quarter, the Company repurchased 36,000 shares of its outstanding common stock at a cost of $138,000, at an average purchase price of $3.85 per share. On March 31, 2008, approximately 26.4 million shares of common stock were outstanding and $9.5 million was available for share repurchase under the Company's stock repurchase program. Captaris may repurchase shares under its stock repurchase program subject to overall market conditions, stock prices and its cash position and requirements.

Evaluation of Strategic Alternatives
In March, 2008, the company announced that the Board of Directors decided to evaluate strategic alternatives to further enhance  hareholder value. To oversee and expedite this process, the Board established a special committee of the Board comprised of independent
directors. This evaluation is ongoing and developments will be disclosed as the Board deems appropriate.

Conference Call
The Company will discuss its 2008 first quarter results and business outlook on its regularly scheduled conference call today, May 9th, at 7:30 a.m. PT (10:30 a.m. ET). The live web cast of the conference call can be accessed from the Captaris Web site at www.captaris.com under
About Us -- Investor Relations or by dialing into the call at 1-800-240-7305 and providing the Company name “Captaris.” An audio replay of the conference call can be accessed at 1-800-405-2236. The replay will be available starting two hours after the call and remain in effect until
Friday, May 16th at 11:59 PT. The required pass code is 11113910#.

About Captaris, Inc.
Captaris, Inc. is a leading provider of software products that automate business processes, manage documents electronically and provide efficient information delivery. The products of Captaris and its subsidiaries Castelle and Captaris Document Technologies GmbH, including Captaris RightFax, Captaris Workflow, Captaris Alchemy, the FaxPress line of products, RecoStar, DOKuStar, DOKuStar Capture Suite, Single Click Entry, ID-Star, BUSY, Invoice CENTER, Tax CENTER, and Mail CENTER are distributed through a global network of leading technology partners. We have customers in financial services, healthcare, government and many other industries, and our products are installed in all of the Fortune 100 and many Global 2000 companies. Headquartered in Bellevue, Washington, Captaris was founded in 1982 and is publicly traded on the NASDAQ Global Market under the symbol CAPA. For more information please visit www.captaris.com.

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