AZCAR Technologies Incorporated
TSX : AZZ

AZCAR Technologies Incorporated

March 30, 2007 18:10 ET

AZCAR Announces Financial Results for 2006

MARKHAM, ONTARIO--(CCNMatthews - March 30, 2007) - Stephen F. Pumple, President & CEO of AZCAR Technologies Incorporated (TSX:AZZ) today announced fourth quarter revenue of C$12,434,563 and record annual revenue of C$60,326,975 in 2006. The Company incurred a loss from active operations of C$210,191 for 2006 compared to a profit of C$1,069,997 in 2005. The consolidated loss for the year was C$3,553,168 which resulted from a valuation write-down of the goodwill of C$2,924,977 and of the future income tax recovery of C$418,000.



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2006 2005 2006 2005
Three Months Ended Dec. 31 Year Ended Dec. 31
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(CDN $000) (unaudited) (unaudited) (audited) (audited)

Revenues 12,435 11,495 60,327 58,000
Cost of goods sold 10,913 8,829 50,657 47,785
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Gross Margin 1,522 2,666 9,670 10,215
Gross Margin % 12.2% 23.2% 16.0% 17.6%
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Operating expenses 2,105 2,486 9,540 8,198
Stock-based compensation 11 (4) 39 34
Amortization 118 87 344 290
Write down of goodwill 2,925 - 2,925 -
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5,159 2,569 12,848 8,522
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Income (loss) before income
Taxes and Minority Interest (3,637) 97 (3,178) 1,693
% of revenues (29.2%) 0.8% (5.3%) 2.9%
Income tax expense (recovery) 199 (23) 373 678
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Income (loss) before Minority
Interest (3,836) 120 (3,551) 1,015
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Minority Interest (1) (42) (2) 55

Net Income (Loss) (3,837) 78 (3,553) 1,070
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Earnings per share
Basic (cents) (24.8) 0.5 (23.0) 7.0
Fully Diluted (cents) (24.8) 0.5 (23.0) 6.4
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Cash dividends per share (cents) 0.0 0.0 0.0 0.0
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The gross margin slipped from the prior year reflecting the shift in the product mix due to reduced services revenue and stronger growth of equipment sales in the AZCAR Digital Products division.

The Company continued to add business development personnel to provide growth through increased customer contact and service. The company also began a process of adding technical skills to match the changing demands of the marketplace. In 2006 the Company maintained a high level of repeat business from its existing customer base while adding several new and important clients.

In the third and fourth quarters, the Company experienced customer initiated delays on two projects which resulted in the underutilization of resources previously committed to those projects. It is anticipated that these projects or a derivation of them will be undertaken in 2007. The order backlog has increased from last year and the business pipeline continues to grow. This reflects the benefits of the additional Business Development sales representatives.

AZCAR Procom, a wholly owned subsidiary specializing in presentation, boardroom and high end media systems, was established in May 2005. The division secured much new business in 2006 and is expected to experience growth during 2007.

The growth of Megahertz Broadcast Systems in the UK resulted from projects for past customers and new customers in the UK, South Africa, Qatar, Kuwait, and other countries. The Company has expanded engineering and sales resources as well as adding an additional 9,250 square feet of assembly space to accommodate the increasing business that is coming from traditional television broadcasters, direct-to-home satellite TV, satellite uplink, mobile broadcast units and other clients.

Management continues to focus on operating efficiencies, improvements in work flow, process and internal controls, all of which will generate improved margins and financial performance of the Company during 2007 and beyond. In late 2007 the Company plans to start implementing a new enterprise software solution that will improve operating efficiencies, strengthen compliance reporting and provide a seamless integrated business information systems environment.

AZCAR is an independent technology integration company providing the broadcast and communications industries with value-driven solutions, consulting, engineering, systems design, integration, project management and the supply of related materials and equipment. The stock trades on the Toronto Stock Exchange under the symbol: AZZ.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

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