Evolved Digital Systems Inc releases results for the year ended December 31, 2006



    MONTREAL, April 2 /CNW Telbec/ - Evolved Digital Systems Inc.
(TSX: EVD)(the "Company"), a leading healthcare technology solutions company,
today announced its results for year ended December 31, 2006.
    As expected, revenue from continuing operations declined approximately
25.1% (18% after excluding the effect of exchange rate fluctuations) to
$10,601,341 for the year ended December 31, 2006 as compared to $14,160,778
for the same period in 2005. The decline is primarily due to contracts that
expired in 2005, for which revenue was included in the prior comparable
period.
    During the third quarter of 2006, the Company obtained a line of credit
for working capital needs in the amount of $1,165,400 (US$1,000,000) to help
offset the decline in technology services revenue. In addition, Evolved
renewed the contracts for four of its existing customers and completed seven
new customer installations during 2006 resulting in equipment solutions
revenue of nearly $2.3 million.
    The favorable effect of contract re-negotiations performed last year for
data center, telecommunications and other operational services is realized in
the 37% reduction in cost of services for 2006 compared to the same period of
2005. In addition, a 10% reduction in selling and administration expenses as
compared to prior year was realized as a result of operational improvements
implemented during 2005 as well as reductions in staffing levels and other
cost saving measures.
    The Company experienced only a slight increase in loss from continuing
operations for the year. The decline in revenue was largely offset by cost
reductions achieved through a continued focus by management on spending. Loss
from continuing operations for the years ended December 31, 2006 and 2005 was
$4,531,498 and $4,338,062 respectively, an increase of $193,436 and 4.5%.
    On March 29, 2007, the Company entered into an asset purchase agreement
with Shimadzu Corporation, Japan ("Shimadzu") whereby Shimadzu would purchase
substantially all of the assets of the Canadian operations of the Company.
This transaction will enable Evolved to satisfy all of its current and
long-term debt obligations and focus on the Company's core radiology business
of managed services solutions for hospitals and imaging centers.
    The results of the Canadian operations have been classified as
discontinued operations resulting in net income (loss) from discontinued
operations of $254,363 and $(1,476,411) for the years ended December 31, 2006
and 2005, respectively.

    
    Financial highlights:
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    Year ended December 31,               2006           2005      % Change
    -------------------------------------------------------------------------
    (in thousands, except share
     and per share data)

    Total revenue                      $ 10,601.3   $ 14,160.8        (25.1%)
    Net income (loss):
      From continuing operations         (4,531.5)    (4,338.1)        (4.5%)
      From discontinued operations          254.4     (1,476.4)       117.2%
        Net loss                         (4,277.1)    (5,814.5)        27.3%
    Basic and diluted income (loss)
     per share:
      From continuing operations            (0.08)       (0.08)           -
      From discontinued operations           0.00        (0.02)           -
        Basic and diluted income (loss)
          per share                    $    (0.08)  $    (0.10)           -
    Weighted average number of
     common shares outstanding
     during the period                 56,488,540   56,488,540            -
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    

    About Evolved

    Through its Digital Imaging Workflow Solution, Evolved serves its clients
with a Managed Services approach proven to increase operational efficiency and
to reduce IT spending in hospitals and imaging facilities across the United
States. Evolved's fully managed, web-based RIS solution includes image and
data verification from a modality to the archive and/or HIS, on-line dictation
and transcription, and optional integrated PACS with 5 years of on-site
storage. Evolved's Managed Services offering provides a unique workflow
solution seamlessly integrated, and backed by a highly qualified and dedicated
team of experts. Evolved's clients can additionally choose to utilize
Evolved's secure, state of the art data center for offsite archiving and
disaster recovery. Evolved's solution addresses common challenges small to
medium sized facilities face today by providing custom solutions, founded on a
pay as you go financial model, and backed by unparalleled off-site customer
service and support. Evolved is a publicly traded company listed on the
Toronto Stock Exchange (TSX: EVD). Corporate headquarters are based in Laval,
Quebec. U.S. offices are located at 5141 Virginia Way, Suite 300, Brentwood,
TN 37027.
    For more information, contact EVOLVED at 1-800-5EVOLVED or visit the
company website at www.evolveddigital.com

    FORWARD_LOOKING STATEMENTS: Certain statements in this communication may
constitute forward-looking statements. They are based on management's current
expectation and could be affected by numerous factors and are subject to
various risks and uncertainties. Certain of those risks and uncertainties are
discussed in company filings with the Canadian Securities Commission. Do not
rely on any forward-looking statements as we cannot predict or control many of
the factors that ultimately may affect our ability to achieve the results
estimated. We make no promise to update any forward-looking statement, whether
as a result of changes in underlying factors, new information or future
events.

    The TSX has neither approved nor disapproved the information contained
    herein.




For further information:

For further information: Linda Willis, Vice President and Controller,
(615) 850-3029, linda.willis@evolveddigital.com; Source: Evolved Digital
Systems Inc.

Organization Profile

EVOLVED DIGITAL SYSTEMS INC.

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