AZCAR announces Q3 revenue of $13,259,000.

MARKHAM, Ontario -- AZCAR Technologies Inc. (TSX:AZZ) Stephen F. Pumple, President & CEO of AZCAR today announced record revenue for the third quarter of $13,259,000. This performance represents a 69% increase over Q3 2003, and results in a year to date revenue increase of 27%, or $7,477,000 to $35,238,000. An increasingly strong Canadian dollar, competitive pricing in the USA market and significant loss provisions related to an HDTV broadcast truck project, adversely impacted Q3 gross margin rates and operating expenses, resulting in a $461,000 loss in the third quarter. Consequently, year to date earnings were reduced to $225,000, or 1.5 cents per share.

2004        2003        2004        2003
                              Three Months             Nine Months
                              Ended Sept 30           Ended Sept 30
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(Canadian $000's)     (unaudited) (unaudited) (unaudited) (unaudited)

Sales                      13,259       7,833      35,238      27,761
Cost of Sales              11,724       6,715      29,804      23,371
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Gross Margin                1,535       1,118       5,434       4,390
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Operating Expenses          1,889       1,560       4,693       4,589
Stock-based
 Compensation                  10           -          29           -
Amortization                   60          79         178         224
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                            1,959       1,639       4,900       4,813
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Operating Income (Loss)     (424)       (521)         534       (423)
Foreign Exchange Loss          82          16         116       1,007
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Income (Loss)
 Before Taxes and
 Minority Interest          (506)       (537)         418     (1,430)
Income taxes expense
 (recovery)                  (62)        (63)          74       (383)
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Income (Loss) Before
 Minority                   (444)       (474)         344     (1,047)
Minority Interest            (17)          29       (119)          61
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Net Income (Loss )          (461)       (445)         225       (986)
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The strong revenue growth in Q3 was attributed to projects in Fiji, Panama, the United Kingdom, South Africa, and to a solid base of customers in the United States. The Q2 2003 acquisition of Megahertz Broadcast Systems in the United Kingdom, and its subsequent performance improvements, accounts for more than 30% of the Q3 revenue increase and more than 60% of the nine-month revenue growth.

The gross margin and operating expenses were adversely affected by the failure of a customer to secure the financing required for two HDTV broadcast trucks. Although the customer remains optimistic that it will obtain the necessary funds, AZCAR has taken provisions for bad debts and for excess inventory of $500,000 and $100,000 respectively, in Q3. A variety of activity continues in an attempt to mitigate these potential damages.

Operating expenses in Q3, excluding the bad debt expenses, decreased by $171,000 from the prior year, primarily as a result of higher staff utilization. The Company also incurred an $82,000 foreign exchange loss in Q3 due to holding US dollars in the period. The foreign exchange environment in the first half of 2004 was relatively stable. However in Q3 2004 the US dollar weakened, reducing the average exchange rate to the Canadian dollar by more than 5%. The US dollar has continued to weaken against the Canadian dollar.

The gross margin earned year to date exceeded the amount earned in the first nine months of last year by $1,044,000 due to the 27% sales increase. YTD operating expenses were reduced by $396,000 excluding the $500,000 bad debt expense in Q3. The 2004 YTD operating income of $534,000 represents a $957,000 improvement over the loss in the same period of 2003. The YTD income tax expense and minority interest reflect significant profitable contributions by the UK subsidiary, Megahertz Broadcast Systems.

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.

This review contains Management's discussion of the AZCAR's operational results and financial condition, and should be read in conjunction with the audited consolidated financial statements for the year ended December, 31, 2003, and the unaudited financial statements for the quarters ended March 31, June 30, September 30, 2004 and management's discussion and analysis (MD&A) for each period.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

AZCAR Technologies Incorporated (TSX:AZZ)