Delta Systems Provides 2007 Business Outlook



    - Preliminary Q4 2006 Revenue Estimate of $5.7 Million, up 34% versus
    Q4 2005 -

    /NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES/

    ROGERS, AR, Jan. 30 /CNW/ - Delta Systems, Inc. ("Delta Systems" or the
"Company") (TSX-V: DLT), a leading developer of factory automation solutions
for the consumer packaged goods industry, today provided its preliminary
revenue estimate for the fourth quarter of 2006 and business outlook for
fiscal 2007. This news release contains forward-looking statements that are
based on the Company's current views; however, actual results may differ
materially from those expressed in such forward-looking statements. For more
information, please refer to the note on forward-looking statements below. All
figures are expressed in U.S. dollars.
    For the fourth quarter of 2006, Delta Systems expects revenues to be
slightly in excess of $5.7 million, representing a 34% increase compared to
the fourth quarter of 2005. For the year ended December 31, 2006, the Company
expects revenues to be approximately $18.1 million, slightly below the
$18.8 million in revenue the Company generated for the twelve months ended
December 31, 2005. Delta Systems does not expect to be profitable for the year
ended December 31, 2006. Revenue for the last six months of 2006 is expected
to be slightly greater than $11.9 million, up approximately 51% versus the
same period in 2005.
    Delta enjoyed solid order bookings in the fourth quarter of 2006 and
major project backlog at December 31, 2006 was approximately $10.0 million, up
29% from $7.8 million at the end of the third quarter of 2006 and up 122% from
$4.5 million at the end of 2005.
    "We experienced a challenging first half in 2006, largely as a result of
a project cancellation and slower than expected orders in quarter one," said
Jake Bushey, President & CEO of Delta Systems. "We are pleased with the strong
turnaround in our business in the second half of 2006, which included record
quarterly revenue in Q3, and strong growth in order bookings. We look forward
to building on our positive momentum in 2007."
    For fiscal 2007, the Company currently expects to generate revenues in
the range of $25 million to $28 million, and Earnings Before Interest, Taxes,
Depreciation and Amortization ("EBITDA")(1) in the range of $750,000 to
$1.5 million. Delta Systems' financial guidance for 2007 is based upon its
current order backlog and business development activities with new and
existing customers.
    "We realized immediate benefits through our acquisition of Food Machinery
Sales in the second quarter of 2006 and through the implementation of our
adjusted business plan, which we have supported with increased sales and
marketing activities targeted at strategic accounts," said Mr. Bushey.
"Looking ahead, we will continue to focus on increasing revenue from our
installed customer base, securing larger implementations, and adding new
customers. Our goal is to achieve profitability in 2007."

    
    (1) EBITDA is a non-GAAP financial measure that is provided because it is
        commonly used as a measure of liquidity. EBITDA is defined as net
        income (loss) before income taxes, interest expense, interest income,
        and depreciation and amortization. Management believes that cash
        flows from operating activities, as determined in accordance with
        generally accepted accounting principles ("GAAP"), is the most
        comparable financial measure. EBITDA should not be construed as an
        alternative to cash flow from operations, and because it is not
        calculated under generally accepted accounting principles, the
        Company's EBITDA may not be comparable to similarly titled measures
        used by other companies.
    

    About Delta Systems

    Delta Systems, Inc. (TSX-V: DLT) develops factory automation solutions
for consumer packaged goods companies. The Company's comprehensive line of
automation equipment includes: high-speed flow wrappers, feeding and
distribution, and labeling and product tracking systems. Delta Systems'
PC-based motion control software, SoftFlow(TM), enhances the speed,
efficiency, precision and flexibility of automation applications on the plant
floor, while providing connectivity to other enterprise systems. The Company
offers a range of customer support services to optimize deployment,
utilization and systems integration. Delta Systems has installations with more
than 100 customers in North America and internationally, including several
Fortune 500 companies. The Company is headquartered in Rogers, Arkansas, and
has approximately 100 employees at product development and customer support
facilities in both Arkansas and Georgia. For more information, please visit:
www.delta-systems-inc.com.

    The TSX Exchange has neither approved nor disapproved of the information
    contained in this news release.

    Caution concerning forward-looking statements

    Certain statements contained in this news release may constitute "forward
looking statements". When used in this news release, the words "may," "would,"
"could," "will," "intend," "plan," "anticipate," "believe," "estimate,"
"expect," and similar expressions, as they relate to Delta Systems or its
management are intended to identify forward-looking statements. Such
statements reflect Delta Systems' current views with respect to future events
and are subject to certain risks, uncertainties and assumptions. Many factors
could cause the Company's actual results, performance or achievements to be
materially different from any future results, performance or achievements that
may be expressed or implied by such forward looking statements, including
among other things, those which are discussed under the headings "Risk
Factors" and elsewhere in documents that Delta Systems files from time to time
with securities regulatory authorities. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying the
forward-looking statements prove incorrect, actual results may vary materially
from those described herein as intended, planned, anticipated, believed,
estimated or expected. Delta Systems does not intend, and does not assume any
obligation, to update these forward-looking statements.

    %SEDAR: 00022918E




For further information:

For further information: Jake Bushey, President and Chief Executive
Officer, Delta Systems, Inc., (479) 619-2585, jbushey@delta-systems-inc.com;
Bruce Wigle, Investor Relations, The Equicom Group Inc., (416) 815-0700 ext.
228, bwigle@equicomgroup.com

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DELTA SYSTEMS, INC.

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