Avatech Solutions Announces First-Quarter Fiscal 2007 Results.

BALTIMORE -- Avatech Solutions, Inc. (OTCBB:AVSO), the nationwide technology experts for design, engineering, and facilities management, today announced financial results for its first quarter ended September 30, 2006.

Total revenue grew 30.6% over the same quarter in the prior fiscal year and totaled $12,045,000 compared to $9,227,000 in the prior period. For the three months ended September 30, 2006, Avatech reported net income of $36,000, or $0.00 per fully diluted share, compared to net income of $166,000, or $0.01 per fully diluted share, in the same period last year.

The Company noted that its services revenue was ahead of its plan, increasing 40.6% from the same period in fiscal year 2006 and that its commission revenue increased 88.2% from year to year. While a portion of the increases in services and commission revenue is attributable to the May 2006 acquisition of Sterling Systems & Consulting, Inc., the Company showed strong organic growth in these revenue categories.

Chief Executive Officer Scotty Walsh commented, "Our business followed its normal seasonal trends in fiscal 2007, with the first quarter being a slower period in terms of revenues and earnings than the Company's second and third fiscal quarters. We are pleased with the contributions of the Sterling business, which met our internal goals for the period, and by the marked increase in Service revenue, which rose to $2.6 million, the highest revenue level the Services business has ever realized. These accomplishments support our goal of transitioning Avatech to a more diversified services and solutions provider.

"Over the past year, we have gradually been shaping and building Avatech's sales and technical staff as part of our strategy to create four distinct industry-focused business units - Building Solutions, Infrastructure and Civil Engineering Solutions, Manufacturing Solutions, and Facilities Management Solutions - that can serve their customers with increased breadth and depth of knowledge. The cost of hiring these additional personnel is reflected in our higher SG&A, which negatively impacted the company's profitability for the first quarter. Demand in our markets continues to be strong, particularly in the 3D design arena, and we are making every effort to bring our new staff to full productivity as quickly as possible.

"We believe Avatech is off to a good start on achieving our full-year revenue target of $55 to $60 million, excluding additional acquisitions, and we remain focused on improving our operating margins by expanding and diversifying our range of products, taking full advantage of cross-selling opportunities, growing our geographic footprint, and increasing our service-oriented business."

Conference Call Information

Avatech will hold a conference call to discuss its first-quarter results at 11:00 a.m. Eastern Time on Wednesday, November 15, 2006. The dial-in number for the conference call is [phone]. (For international callers, the dial-in number is 706-643-9926.) A replay of the call will also be available through Wednesday, November 22, 2006, and can be accessed by dialing [phone], conference ID #1583005. An audio replay of the conference call will be available in the Investor Relations section of the Company's Web site, http://www.avatech.com.

About Avatech Solutions

Avatech Solutions, Inc. (OTCBB:AVSO) is the recognized leader in design and engineering technology with unparalleled expertise in design automation, data management and process optimization for the manufacturing, engineering, building design and facilities management markets. Headquartered in Owings Mills, Maryland, the company specializes in consulting, software systems integration and implementation, standards development and deployment, education, and technical support. Avatech is one of the largest integrators of Autodesk software worldwide and a leading provider of PLM solutions. The company's clients include industry leaders from Fortune 500 and Engineering News Record's Top 100 companies. Visit http://www.avatech.com for more information.

Forward-looking Statement

This press release contains forward-looking statements about the expectations, beliefs, plans, intentions, and strategies of Avatech Solutions, Inc. There are a number of important factors that could cause actual results to differ materially from those anticipated by any forward-looking information. Statements that are not historical in nature, including those that include the words "goal," "expect," "anticipate," "estimate," "should," "believe," "intend," and similar expressions, are based on current expectations, estimates and projections about, among other things, the industry and the markets in which Avatech operates, and they are not guarantees of future performance. Whether actual results will conform to expectations and predictions is subject to known and unknown risks and uncertainties, including risks and uncertainties discussed in this report; general economic, market, or business conditions; changes in interest rates, and demand for our products and services; changes in our competitive position or competitive actions by other companies; the ability to manage growth; changes in laws or regulations or policies of federal and state regulators and agencies; and other circumstances beyond our control. Consequently, all of the forward-looking statements made in this document are qualified by these cautionary statements, and there can be no assurance that the actual results anticipated will be realized, or, if substantially realized, will have the expected consequences on our business or operations.

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