Webtech Wireless Confirms Commitment to Growth Strategy in First Quarter Fiscal 2005 Results

WebTech Wireless Inc. (TSX VENTURE:WEW), today reported quarterly results for the first quarter in fiscal 2005 of $1.34 million in total revenue, an increase of 7.5% from $1.25 million in the first quarter of fiscal 2004. Net loss for the quarter was $268 thousand compared to a net profit of $26 thousand for the same quarter last year. Recurring subscriber service revenues increased 101% over the same quarter in 2004.

"Our plan for the first quarter in fiscal 2005 anticipated a loss of $642 thousand, said Anwar Sukkarie, President and Chief Executive Officer. "We have been investing in infrastructure and growing our sales team to provide exemplary service and products to our subscribers. We have seeded the market with trials that include large organizations with significant growth potential. We experienced and rectified supply chain challenges as we started to outsource manufacturing to a facility in China. This resulted in a backlog of more than $500 thousand coming into the second quarter of 2005. WebTech's backlog for products and service at the beginning of Q2 was $7 million. This backlog is from a combination of orders with existing and new customer and recurring subscriber service charges. We continue to follow our growth strategy, building our customer base to include large organizations and evolving WebTech into a world class leader in the location-based and Telematics products and service industry."

Results from Operations for Quarter 1 2005 Compared with Quarter 1 2004

The financial results in first quarter in fiscal 2005 compared to the results in the first quarter of fiscal 2004 showed growth and improved performance. In Q1 2005 WebTech achieved $1,341 thousand in revenues against $1,247 thousand in Q1 2004, while gross profits stayed strong at $660 thousand compared to $689 thousand in the same quarter last year. Operating expenses including sales and marketing, administrative, product development costs, and interest and foreign exchange losses were $928 thousand compared to $663 thousand for the same quarter last year. The increases were because the Company hired staff (30% increase in headcount over year-end) and increased its infrastructure costs to support the rapid ramp up in sales. In Q1 2005 WebTech realized a net loss of $268 thousand compared with a net income of $26 thousand for the same quarter the year previous.

Below are the main accomplishments of the first quarter of fiscal 2005.

- Total revenue of $1.34M, which represents an increase of 7.5% over Q1 of fiscal 2004.

- Subscriber revenue increased by 101% when compared to Q1 prior year.

- Gross margins maintained at 49%.

- Seeded market in Europe and experienced growth in France and the United Kingdom with several new large opportunity trials.

- Subsequent to the quarter end WebTech took over the European business of GlobeTrac on November 1st.

- Confirmed our commitment to growth by investing in infrastructure to support anticipated increase in customer base.

- Hired Neil Chan, as our Senior VP Business Development, responsible for North American sales.

- Continued to expand our sales team by opening offices in the southeastern and northeastern USA as well as adding a strategic sales position to focus on large Fortune 500 opportunities.

- Added personnel to our, customer service, research and development, and finance teams. Head count increased by 30% over Q4 fiscal 2004.

- Three major brokerage firms have initiated coverage of WebTech Wireless with a BUY recommendation.

- Announced the release of Quadrant 5.0, our latest enhanced version of the Location-based and Telematics service-provisioning platform.

- Signed a partnership agreement with TMW Systems, a provider of dispatch, logistics and trucking software to over 450 trucking companies worldwide, representing 120,000 vehicles. The partnership brings integrated solutions to tens of thousands of potential vehicles.

- Announced a partnership with Volkswagen Brazil to offer location-based and Telematics services to new Volkswagen Golf models through Crown Telecom, our local distributor in Brazil. The partnership could develop into significant business to WebTech over the coming few years.

- Lowered manufacturing costs on the WebTech 5000 Locator by utilizing a contract manufacturer in China.

- WebTech continues to have a solid balance sheet with no debt, a $500,000 line of credit ($0 drawn to date), $1.4M in inventory, and $1.2M of cash in our accounts. The working capital ratio is a strong 4.85:1.

About WebTech Wireless Inc.

WebTech Wireless Inc. (TSX VENTURE:WEW) is a global Wireless 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 over thirty-seven countries covering five continents. WebTech's scalable solutions are used by a broad range of small, medium, Fortune 500 companies and governments.

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.

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The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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