WebTech Wireless Inc.
TSX VENTURE : WEW

WebTech Wireless Inc.

October 30, 2006 12:12 ET

WebTech Wireless Reports Profit of $1.1 Million, or $0.03 per Common Share, on $16.3 Million Revenue

BURNABY, BRITISH COLUMBIA--(CCNMatthews - Oct. 30, 2006) - WebTech Wireless Inc. (TSX VENTURE:WEW), a leading supplier of mobile telematics, today reported record revenue of $16.3 million for the year ended July 31, 2006, representing an increase of 58% over prior year revenue of $10.3 million. Net income for the year was $1.1 million ($0.03 per common share) compared with $.4 million ($0.01 per common share) for the prior year. The Company reported a gross profit margin of 50.5% compared with 49.6% for the prior year.

The Company realized an increase in international revenue due to growth in worldwide demand for location based services. Revenue from sales to North America increased by 26.9% over the prior year as sales to government fleets and small to medium commercial fleets increased. Also during the year, the Company launched a new suite of products targeted at the long haul trucking sector, contributing to the increase in North American sales. In January, 2006 the Company made a landmark sale to Crown Telecom of Brazil for installation of its locators in certain new models of Volkswagen for the Brazil market, driving a 390.8% increase in sales to that region during the year.

WebTech Wireless reported that expenses increased by 55.0% from $4.6 million for fiscal 2005 to $7.2 million for fiscal 2006, primarily due to an increase in staffing across all departments from 64 members at the beginning of the year to 98 members at July 31, 2006. The Company increased its research and development activities, expanded its sales and marketing team and built its administrative and operational staff to prepare for future growth.

For the quarter ended July 31, 2006, WebTech reported revenues of $5.0 million representing 52.7% growth over revenues of the prior comparable quarter of $3.3 million. Net income of $.609 million ($0.02 per common share) almost doubled compared with net income of $.235 million ($0.01 per common share) in the prior comparable quarter. The Company earned a gross profit margin of 51.4% compared with a gross profit margin of 50.7% for the same quarter of the prior year.

At year end, the Company reported total assets of $22.3 million (2005: $6.9 million) and working capital of $18.8 million (2005: $5 million). During the year the Company generated $1.6 million (2005: $0.91 million) from operating activities, calculated as net income after adding back amortization and stock based compensation. The Company generated $13 million (2005: $1.1 million) from the issue of common shares, of which $9.3 (net of issue costs) was pursuant to a private placement in April, 2006.

"2006 was an important year for WebTech, as we took steps to position the Company to service significantly larger fleets," comments Juliet Jones, Chief Financial Officer of WebTech Wireless Inc. "We expanded into the consumer automotive market with the provision of Locators to Volkswagen in Brazil and we expanded into the long-haul trucking and transportation market with our introduction of a new targeted product offering. We entered into relationships with Motorola and IBM for worldwide distribution of our products and services. During the year we increased our working capital and built our infrastructure to enable our next phase of growth."

The Company announces that it will hold a conference call on October 30, 2006 at 5:00 PM Eastern Time and that a recording of the conference call will be posted on the Company's website at www.webtechwireless.com within 24 hours of the call. Interested parties may participate in the call by dialing 1-877-331-7860 or 416-620-2418 (international callers). The financial statements and management's discussion and analysis will be posted on the Company's website prior to the conference call. Further information on the Company may also be viewed at www.sedar.com.

About WebTech Wireless Inc.

WebTech Wireless Inc. (TSX VENTURE:WEW) is a global Telematics, location-based services provider that develops, manufactures, and delivers turnkey wireless solutions designed to improve productivity and profitability. WebTech products include wireless hardware and software services running on cellular and satellite networks, and include Automatic Vehicle Location, Mapping, Reporting, Vehicle Maintenance, Driver Status, In-vehicle Telemetry, Messaging, In-vehicle Navigation, and wireless application and Internet connectivity. WebTech is currently providing devices and services worldwide in eight languages to over forty-one countries covering five continents. WebTech's scalable solutions are used by a broad range of small, medium, Fortune 500 companies and governments. For more information, please visit www.webtechwireless.com.

Forward-Looking Statements

This press release contains forward-looking statements involving risks and uncertainties pertaining to, but not limited to product plans, timing, content, and pricing of products, market and industry expectations, the wireless communications industry, the mobile fleet industry, and general economic and political conditions. Given the risks and uncertainties inherent in the markets and industries referred to in this press release, WebTech cannot guarantee that any forward-looking statements will be realized.

Trademarks are the property of their owners.



WEBTECH WIRELESS INC.
CONSOLIDATED BALANCE SHEETS
July 31, 2006 and 2005
(amounts in 000's)

2006 2005
---------- ----------

ASSETS
Current
Cash & cash equivalents, Note 14 $ 10,640 $ 1,072
Accounts receivable, Note 14 7,015 2,825
Inventory, Note 4 2,849 1,944
Prepaid expenses and deposits 800 440
---------- ----------

21,304 6,281
---------- ----------

Capital Assets, Note 6 738 449
Intangible assets, Note 3 292 168
---------- ----------

$ 22,334 $ 6,898
---------- ----------
---------- ----------

LIABILITIES
Current
Accounts payable and accrued liabilities,
Notes 12 and 14 $ 2,198 $ 1,256
Deferred revenue 294 22
---------- ----------

2,492 1,278
---------- ----------

SHAREHOLDERS' EQUITY
Share capital, Note 7 21,105 8,196
Contributed surplus, Note 8 574 365
Deficit (1,837) (2,941)
---------- ----------

19,842 5,620
---------- ----------

$ 22,334 $ 6,898
---------- ----------
---------- ----------

Nature of Operations, Note 1
Commitments, Notes 3, 7 and 11
Subsequent Events, Note 15

APPROVED BY THE DIRECTORS:

Anwar Sukkarie Cameron Fraser

The notes form an integral part of these Consolidated Financial Statements.


WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Years Ended July 31, 2006 and 2005
(amounts in 000's except per share amounts)

2006 2005
---------- ----------

Sales, Note 13 $ 16,344 $ 10,316

Cost of goods sold 8,095 5,195
---------- ----------

Gross profit 8,249 5,121
---------- ----------

Expenses
Administration, Note 12 1,897 1,026
Amortization 342 316
Marketing and sales 2,785 2,059
Research and development, Note 12 2,154 1,234
---------- ----------

7,178 4,635
---------- ----------

Income before other items 1,071 486

Other items
Interest Income 164 16
Foreign exchange loss (131) (63)
---------- ----------

Net income for the year $ 1,104 $ 439
---------- ----------

Basic earnings per share $ 0.03 $ 0.01
---------- ----------
---------- ----------

Fully diluted earnings per share $ 0.03 $ 0.01
---------- ----------
---------- ----------

Weighted average number of common shares
outstanding 42,240,524 34,081,644
---------- ----------
---------- ----------


WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENTS OF DEFICIT
For the Years Ended July 31, 2006 and 2005
(amounts in 000's except per share amounts)

2006 2005
---------- ----------

Deficit, beginning of the year $ (2,941) $ (3,032)
Income for the year 1,104 439
Adjustment to Prior Year Retained Earnings,
Note 2 (g) - (348)
---------- ----------
Deficit, end of the year $ (1,837) $ (2,941)
---------- ----------
---------- ----------

The notes form an integral part of these Consolidated Financial Statements.


WEBTECH WIRELESS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended July 31, 2006 and 2005
(amounts in 000's)

2006 2005
---------- ----------

Operating Activities
Net income for the year $ 1,104 $ 439
Add items not affecting cash:
Stock based compensation 155 153
Amortization 342 316
---------- ----------

1,601 908

Changes in non-cash working capital items
related to operations:
Accounts receivable (4,190) (1,875)
Scientific research tax credits receivable - 202
Inventory (905) (857)
Prepaid expense and deposits (360) (105)
Accounts payable and accrued liabilities 942 589
Deferred revenue 272 2
---------- ----------

(2,640) (1,136)
---------- ----------

Financing Activities
Common shares issued, net of costs 12,962 1,146
---------- ----------

12,962 1,146
---------- ----------

Investing Activities
Purchase of intangible assets (156) (112)
Purchase of capital assets (598) (364)
---------- ----------

(754) (476)
---------- ----------

Net increase (decrease) in cash during the year 9,568 (466)

Cash and cash equivalents, beginning of year 1,072 1,538
---------- ----------

Cash and cash equivalents, end of year $ 10,640 $ 1,072
---------- ----------
---------- ----------

Cash paid for interest $ 1 $ -
---------- ----------
---------- ----------

Cash and cash equivalents consist of:
Cash $ 890 $ 1,072
Term deposits 9,750 -

---------- ----------
$ 10,640 $ 1,072
---------- ----------
---------- ----------

Non-cash transactions, Note 10

The notes form an integral part of these Consolidated Financial Statements.



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