AZCAR Technologies Incorporated

AZCAR Technologies Incorporated

March 30, 2006 15:44 ET

AZCAR Announces Record Revenue of C$58 Million in 2005

MARKHAM, ONTARIO--(CCNMatthews - March 30, 2006) - Stephen F. Pumple, President & CEO of AZCAR Technologies Incorporated (TSX:AZZ)today announced fourth quarter revenue of C$11,494,603 and record annual revenue of C$57,999,652 in 2005. Revenue grew by 16.4% for the fiscal year compared to 2004. Net income for 2005 was C$1,069,997, an increase of 654% over 2004 and 7.0 cents per share. The Company's gross margin continues to improve year-over-year.

2005 2004 2005 2004
Three Months Ended Dec. 31 Year Ended Dec. 31
(Canadian $000) (unaudited) (unaudited) (audited) (audited)

Revenues 11,495 14,603 58,000 49,841
Cost of goods sold 8,829 12,714 47,785 42,518
Gross margin 2,666 1,889 10,215 7,323
Gross margin % 23.2% 12.9% 17.6% 14.7%
Operating expenses 2,478 1,785 7,939 6,508
Foreign exchange (gain) loss 4 101 293 217
Amortization 87 116 290 293
2,569 2,002 8,522 7,018
Income (loss) before taxes
and Minority Interest 97 (113) 1,693 305
% of revenues 0.8% -0.8% 2.9% 0.6%
Income tax expense (recovery) (23) (77) 678 (2)
Income (loss) before
Minority Interest 120 (36) 1,015 307
Minority Interest (42) (47) 55 (165)

Net Income (Loss) 78 (83) 1,070 142
Earnings (loss) per share $0.01 ($0.01) $0.07 $0.01
Cash dividends - - - -

Three themes dominated the AZCAR landscape this year: growth, addition of senior management and improvements in business processes. In 2005 the Company enjoyed a high level of repeat business from its existing customer base while adding several new and important clients. Two of the new clients, Crown Castle and AT&T (the former SBC) demonstrate the evolving nature of AZCAR's client base. Crown Castle provides streaming media to cell phones while AT&T offers video services using IPTV technology.

In the fourth quarter, the Company leveraged its established strengths into additional markets by adding an office in Atlanta and sales representatives in Seattle, Los Angeles and Chicago. These additions have generated a strong order backlog leading into 2006.

AZCAR Procom, a wholly owned subsidiary specializing in presentation, boardroom and high end media systems, was established in May 2005. The division met its 2005 targets and has entered 2006 with several significant projects in hand and is expected to experience strong growth.

Megahertz, AZCAR's UK subsidiary, had a challenging beginning to 2005 but has continued to build a strong base of business in the areas of High Definition Outside Broadcast (OB) vehicles, Digital Satellite News Gathering (DSNG) vehicles and other specialized communications vehicles.

Management continues to focus on operating efficiencies, improvements in workflow, process and internal controls, all of which have resulted in improved margins and financial performance of the Company. In 2006 the Company plans to implement 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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