Pace Medical, Inc. Announces 2005 Consolidated Results.

WALTHAM, Mass. -- Pace Medical, Inc. (Pink Sheets:PMDL) announced today its 2005 consolidated financial results for Pace Medical, Inc. and its subsidiary APC Medical Ltd. Sales increased 19 percent over prior year to $1,447,034, while gross profit improved to 56 percent of sales. Overall, financial results improved significantly over prior year results due to, improved sales performance and a reduction in Cost of Sales. See attached Statement of Operations.

"Overall, 2005 was a solid year for Pace Medical," said Ralph E. Hanson, Chairman. "New Product Development continued throughout the year, as well as improvements with key Vendors for the supply of components."

Steven E. Hanson, President and CEO, commented that, "2005 was a building year for the Company as we positioned ourselves to grow through market expansion, timely deliveries of existing products and new product development, while improving our cost structure."

Pace Medical designs and manufactures external heart pacemakers and accessory products used in pacing the heart and monitoring equipment to detect the performance of cardiac rhythm device performance. Its headquarters are located in Waltham, Massachusetts, with a wholly owned subsidiary, APC Medical Ltd, located in Welwyn Garden City, England.

Safe Harbor Statement

Cautionary Statement for purposes of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. From time to time, information provided by the Company or statements made by its employees may contain "forward-looking" information which involves risks and uncertainties. In particular, statements contained in this release which are not historical facts (including but not limited to the Company's expectations regarding new product availability), may be "forward-looking" statements. The Company's actual results may differ from those stated in any forward-looking statements. Factors that may cause such differences include, but are not limited to, risks associated with the introduction of new products including supplier performance, development of markets for new products offered by the Company, personnel requirements, the Company's relationships with distributors and OEM's, the economic health of such OEM's, government regulation, competition, general economic conditions, and other factors disclosed in the Company's filings with the Securities and Exchange Commission.

PACE MEDICAL, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF OPERATION
YEARS ENDED DECEMBER 31, 2005 AND 2004
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                                                     2005        2004

TOTAL NET SALES                                $1,447,034  $1,216,624

COST OF SALES                                     633,993     664,402
                                               ----------- -----------

GROSS PROFIT                                      813,041     552,222

OPERATING EXPENSES
               Selling, general, and
                administrative                    804,904     753,666
               Engineering/development            192,925     117,191
                                               ----------- -----------

LOSS FROM OPERATIONS                             (184,788)   (318,635)

OTHER INCOME - Primarily interest                  38,745      23,754
                                               ----------- -----------

LOSS BEFORE INCOME TAX EXPENSE                   (146,043)   (294,881)

INCOME TAX EXPENSE                                 40,996      14,751
                                                ----------  ----------

NET LOSS                                       $ (187,039) $ (309,632)
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NET LOSS PER SHARE - Basic and diluted         $    (0.05) $    (0.09)
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